Exchange Income Corporation (EIC), a specialist firm in diversified acquisitions, has announced a significant expansion of its aviation footprint in Canada’s North.
The company has entered into a binding agreement to acquire Bradley Air Services Limited, operating as Canadian North.
The transaction, valued at $205 million, marks a pivotal moment in Northern air travel. This strategic acquisition positions EIC to become the dominant provider of essential air services across the vast Arctic landscape.
A Strategic Move into Complementary Markets
The acquisition of Canadian North aligns perfectly with EIC’s existing aviation portfolio. Canadian North, a vital lifeline for remote Arctic communities, provides passenger and cargo services to 24 communities in Nunavut and the Northwest Territories.
With hubs in Ottawa and Edmonton, the airline serves two-thirds of its revenue base, alongside dedicated charters for resource customers in Alberta and British Columbia. This service is delivered through a fleet of 737 jets and ATR turboprops, supported by substantial infrastructure including hangars in key locations.
Crucially, Canadian North’s operations are highly complementary to EIC’s existing subsidiary, Calm Air. While Calm Air serves the central region of Nunavut, Canadian North focuses on the eastern and western regions.
Furthermore, Canadian North’s presence in the Northwest Territories fills a gap in EIC’s current service map. This synergy allows EIC to offer comprehensive coverage across the entire Canadian Arctic, a first for the company.
Strengthening Essential Services in the North
Air travel in the North is not a luxury, but a necessity. With no road access to Nunavut, air services are the lifeblood of these communities. EIC’s acquisition of Canadian North reinforces its commitment to providing stable and efficient services to these remote regions.
EIC’s dedication to Northern aviation is evident in its long history of serving these communities. The company now plans to build upon Canadian North’s existing efforts. This includes community infrastructure investments, and training programs like the Atik Mason Indigenous Pilot Pathway.
It will continue to support enhanced employment opportunities. This commitment ensures that the acquisition benefits not just EIC, but the communities it serves.
A Vision for Growth and Efficiency
Mike Pyle, CEO of EIC, emphasized the company’s deep understanding of the North, built over decades of investment and relationship-building.
He highlighted the natural fit between Canadian North and EIC’s existing operations. Pyle stated that the combined resources and expertise will lead to increased efficiency and enhanced service levels.
Carmele Peter, President of EIC, echoed this sentiment, stressing the importance of understanding the unique environment and the essential nature of the services provided.
She acknowledged the strong relationships Canadian North has built with its customers and shareholders, Makivik Corporation and Inuvialuit Development Corporation, and pledged to further enhance these relationships.
Shelly De Caria, President & CEO of Canadian North, expressed excitement about joining the EIC family, citing their commitment to investment and growth. She emphasized Canadian North’s role as a lifeline for the North, connecting families and supporting critical commerce.
Looking to the Future
Adam Terwin, CCDO at EIC, highlighted the steady demand and high growth potential in the North, driven by factors such as Arctic sovereignty and resource development. While acknowledging that initial returns on capital may be below expectations, he projected steady growth and achievement of targeted returns within two years.
The acquisition, funded through a combination of EIC common shares and its credit facility, is subject to regulatory approvals and customary closing conditions. It excludes the Montreal to Kuujjuaq route, which will remain with Makivik Corporation.
This strategic move by EIC signifies a major investment in the future of Northern Canada. It combines the strengths of Canadian North and EIC’s existing aviation assets.
The company is now poised to drive further economic growth, and strengthen the vital connections that sustain these remote communities.
This acquisition solidifies EIC’s position as a leading provider of essential services in the Canadian Arctic, ensuring a reliable and efficient lifeline for the North.
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