Erickson Air-Crane Inc.
) unit, Evergreen Helicopters International, received a new
five-year contract to provide comprehensive replenishment and
logistics services to Military Sealift Command.
This firm-fixed price contract will provide replenishment support
to the U.S. Fifth and Seventh fleet. These operate largely in the
Indian Ocean and Pacific areas and the company's support
comprises both sea-based and shore-based support using
helicopters. The aggregate value of the contract is $36.6 million
and has one base year of performance with four option years.
Erickson-Air Crane has been known to offer aircraft services to
the U.S. military over the past four decades. The key factor that
drives Erickson-Air Crane's business is its diversified nature of
operations. From transport to the energy sector, the company has
been successful in spreading its business capabilities in the
U.S. as well as in the international market.
The buyout of Evergreen Helicopters from Evergreen International
Aviation, Inc. is considered to be an important catalyst for
Erickson-Air Crane's growth prospects. This high-quality
acquisition boosted the company's industry position and allowed
it to secure a slew of domestic and overseas contract extensions
in the first half of 2013. Evergreen Helicopters is a diversified
provider of air transport services worldwide for cargo and
personnel to government and commercial customers.
Again, Erickson Air-Crane entered into a definitive purchase
agreement with HRT Participações em Petróleo S.A. ("HRT") to
acquire its aviation services division, Air Amazonia Serviços
Aeronauticos Ltda. ("Air Amazonia"). Also, per the agreement, the
company will take possession of a fleet of six aircraft and
ground facilities of HRT. This acquisition will help the company
to continue to expand in the South American oil and gas markets.
Despite Erickson Air-Crane's judicious acquisitions as well as
contract wins, the company is vulnerable to defense budget cuts
Erickson Air-Crane presently retains a short-term Zacks Rank #3
(Hold). However, other companies in the space that look favorable
for the short term include
Northrop Grumman Corp
Lockheed Martin Corp.
Huntington Ingalls Industries
), all with a Zacks Rank #2 (Buy).
ERICKSON AIR-CR (EAC): Free Stock Analysis
HUNTINGTON INGL (HII): Free Stock Analysis
LOCKHEED MARTIN (LMT): Free Stock Analysis
NORTHROP GRUMMN (NOC): Free Stock Analysis
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