Porter Aviation Holdings will pitch a growth story at investors when the airline begins marketing a planned $120-million initial public offering next week.
Porter filed the paperwork Friday for a stock sale that's expected to finance the purchase of new aircraft - it flies Bombardier Q400 turboprop planes that retail for roughly $20-million each. It's the latest expansion for an upstart airline that just keeps expanding.
Founder Robert Deluce overcame fierce local opposition to launch service with just two planes in 2006. Over the past four years, Mr. Deluce and his team kept winning market share from far larger rivals such as Air Canada to boast a fleet of 18 planes, flying to 14 cities.
RBC Dominion Securities will lead the Porter IPO. None of the airline's existing shareholders are selling their stakes as part of the IPO. This is what's known as a treasury offering - all of the money raised will be used by the company, none taken out by its existing owners.
In that regard, this deal looks much like the IPO of retailer Dollarama last year, and that was a successful debut, co-led by RBC Dominion. Dollarama's private equity backer sat tight in the IPO - the cash raised was used to pay down debt. Controlling shareholder Bain Capital subsequently sold $500-million of stock, after Dollarama had proven its merits to public market investors.
Porter's private equity investors stand to turn a handsome profit when they do eventually cash in. EdgeStone Capital Partners, OMERS unit Borealis Infrastructure, GE Asset Management and family-owned Dancap Private Equity put money into the airline.
Andrew Willis