US regional operator Republic Airways Holdings is continuing its acquisition spree through the planned purchase of Midwest Airlines.
Today's disclosure of the Midwest buy follows by one day an announcement by Republic and Frontier Airlines that Indianapolis-based Republic proposes to buy Frontier upon the carrier's emergence from Chapter 11 for $108 million.
Republic is purchasing Midwest from TPG Capital, who along with Northwest Airlines acquired Midwest in 2007 as a bid by AirTran to purchase Midwest failed.
Through the new agreement, Republic is acquiring 100% of the equity of Midwest and TPG's $31 million secured note from Midwest.
"Consideration will be $6 million in cash and a $25 million, five-year note, which may be converted to Republic stock at $10 per share," Republic explains in a statement. TPG has also secured the right to nominate a member to Republic's board.
Like Frontier, the Midwest brand will continue. However, Midwest will replace its remaining Boeing 717s with Embraer E-190s. Midwest in late 2008 returned 16 of its 25 717s to Boeing Capital.
Last month Republic and Midwest announced that the regional operator would fly two extended range "AR" E-190s for Midwest, and the first 94-seat aircraft is being placed on flights from Milwaukee to Los Angeles on 1 August.
Midwest is also adding smaller jets to its network through Republic's operation of 12 37-to-50-seat jets sourced from Republic's existing fleet or through a third party lessor.
Republic's relationship with Midwest began last year when the two carriers reached a deal for Republic to operate 12 E-170s on behalf of Midwest. Republic at the time also extended its first loan to Midwest of $15 million, and so far has loaned the carrier a total of $31 million.
Republic expects the Midwest acquisition to close in four-to-six weeks.