Stonepeak Takes Air Transport Services Group Private for $3 Billion

Stonepeak announced it will be taking Air Transport Services Group (ATSG) private in a deal valued at $3 billion. Structured as an reverse triangular, the transaction terms include a relatively short 25 day go shop provision whereby ATSG may seek alternative deals. Just 8.45% of deals over the last 12 months include such provisions and the median duration is 31.5, which means ATSG must move quickly to find a better offer. 

“Since going public in 2003, ATSG has diversified and expanded its portfolio of companies and services, becoming a global leader in midsize freighter leasing and flying, as well as a leading supplemental provider of passenger transport for the U.S. Department of Defense and other agencies,” according to the deal’s press release. “ATSG plays a fundamental role in enabling the growth of e-commerce globally in a world that continues to shift away from brick-and-mortar shopping.”

figcaption class=”wp-element-caption”>Source: Wolf Street

The covid-19 pandemic accelerated consumers’ shift from bricks and mortar to e-commerce starting in 2020. With stores shuttered during lockdowns, traditional retail sales plunged by 10% before rebounding during the last months of the year. During the surge of post-pandemic spending, retail sales increased during 2021-2022, but have stagnated since. 

At the same time, e-commerce sales skyrocketed 40% during the lockdowns – and climbed rapidly since. In fact, e-commerce sales have jumped 120% since 2019, while bricks and mortar revenue have increased less than 30% during the same period. Customers still prefer bricks and mortar when shopping for cars, gasoline, and food, but even those segments are slowly shifting online as well. 

Leading e-commerce companies worldwide as of December 2024

figcaption class=”wp-element-caption”>Source: DoorLoop

Amazon dominates the space, with over $2.2 billion in market cap. Bricks and mortar stores, which are not included in the above chart focused on e-commerce companies, have also entered the arena: Walmart, the largest retailer in the world, has supplemented its bricks and mortar offerings with e-commerce. In fact, the company’s global ecommerce sales grew over 20% year over year for the third straight quarter.

According to Walmart CEO Doug McMillon, “In the U.S., in-store volumes grew, curbside pickup grew faster, and delivery sales grew even faster than that.” ATSG and Stonepeak plan to capitalize on such e-commerce growth by providing the shipping services needed to get those packages into customers’ homes.

According to DealPulse’s M&A database, which harnesses both AI and attorneys to digest the granular deal points of publicly-announced transactions, ATSG is advised by law firms Davis Polk & Wardwell LLP and Vorys, Sater, Seymour and Pease LLP, while Stonepeak is advised by Simpson Thacher & Bartlett LLP and Hogan Lovells.