Exchange Income buys B.C.’s Carson Air

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This article was published 05/07/2021 (1270 days ago), so information in it may no longer be current.

Exchange Income Corp. has acquired Kelowna, B.C-based Carson Air for $61 million, adding another regional operator to the Winnipeg-based company’s medevac business that is now getting close to becoming a national offering.

With its fleet of eight Super King Air 350s and Cessna Citation Encore’s, Carson Air is the primary provider of fixed-wing air ambulance services in B.C.

The acquisition checks all the boxes the Exchange Income Corp. (EIC) requires in its acquisitions, including that the company is a market leader in its field, has excellent management who agree to remain in place and comes with a selling price that is not inflated.

EIC’s chief executive officer, Mike Pyle, said not only does EIC management love the medevac business, but there is a defensible case to be made that it is really good at it as well.

“One thing that is exciting for us as we come out of (this) pandemic is that we saw how resilient most of our businesses were,” he said. “We liked the medevac business going into the pandemic. We love it coming out.”

Carson serves many communities in northern B.C. and just like Keewatin Air and Perimeter Aviation’s work in Manitoba and Nunavut, as travel restrictions begin to loosen, it is expected that pent-up demand will cause a solid uptick in business.

In addition to its aviation businesses — that includes Keewatin, Perimeter and Calm Air in Manitoba and PAL Aviation in Newfoundland — EIC owns a number of manufacturing operations throughout Canada and the U.S.

Its diversified operating companies have proven to be a good mix during the pandemic. The company has been able to maintain its dividend payments and its stock price at $41.17 is not far off its all-time high of $44.64.

As EIC gains expertise and credibility in the medevac business Pyle said the company intends to grow it across the country both organically, by winning more contracts, and via further acquisitions.

But, having said that, if EIC does build a national presence it plans to maintain the regional brands.

“I think that is something you will see as we move forward, to show our national capability,” he said. “But Kevin Carson (the founder of Carson Air) spent a lot of time and money building recognition for that company in B.C. and that’s not something we would like to give up.”

Carson Air was established in 1990 and has a long history of being the primary provider of fixed-wing air ambulance services in B.C. providing contracted air ambulance services within B.C. from operating bases in Kelowna and Vancouver. In addition to air-ambulance services, Carson Air’s primary business, it provides dedicated cargo services in B.C. and Alberta and operates a flight school, Southern Interior Flight Centre.

EIC also announced it was in the final stages of due diligence before closing on three other undisclosed acquisitions totalling another $53 million.

Those smaller companies — two in the manufacturing sector and one in aviation — are all in Canada and are all tuck-in deals supporting companies already in EIC’s portfolio.

Pyle said the company has been able to do these deals, despite COVID travel restrictions across North America, because of its familiarity in the sectors those companies operate in and because of the company’s growing reputation of supporting the companies that it acquires.

One of the key elements of companies that EIC targets is that they need to have strong corporate cultures that EIC is then committed to nurturing.

Pyle said sometimes people make assumptions about cramming companies together when doing acquisitions.

“The culture of a business is not the main thing, it is the only thing,” Pyle said.

martin.cash@freepress.mb.ca