Gama Aviation has acquired the business of UK-based air ambulance operator Specialist Aviation Services (SAS) for £280,000 ($342,000) via a pre-pack administration.
Loss-making SAS was put up for sale in December through an “accelerated” process after a financial review determined that its capital structure was “unsustainable”. Gama in early January disclosed that talks with SAS were taking place.
Under the acquisition, three air ambulance contracts run by SAS have transferred to Gama, alongside six leased Leonardo Helicopters AW169s. Two maintenance contracts in the Middle East and a Leonardo service centre in the UK have also moved over.
Gama estimates the deal will add annual turnover of around £27 million to its special mission business unit.
In the 12 months to 31 December 2022, SAS recorded turnover of £24.3 million and a pre-tax profit of £2.7 million, partly driven by one-off gains from restructuring.
Although the results for 2023 have yet to be published, the company “would have reported an underlying loss”, says Gama; it believes the SAS business can be returned to profitability at the pre-tax level during the first half of 2024.
While it has paid a headline price of £280,000 for SAS, UK-listed Gama says the total cost is closer to £3 million once working capital requirements and provisions for restructuring are factored in.
In addition, the company will take on helicopter and property leases amounting to around £8.7 million annually.
Marwan Khalek, Gama group chief executive, says the acquisition “accelerates the growth” of its special mission business unit, which already provides air ambulance services in Scotland and Wales.
“We believe that there is considerable potential within the trade and assets of this business, that over the medium term will enhance the prospects of the special mission business unit.
“However, given the nature of the acquisition, our immediate priority is to ensure continuity of service for the UK air ambulance charities such that they are able to maintain their life-saving operations.”
To enable the smooth transition between providers, the UK Civil Aviation Authority has assigned all of SAS’s regulatory approvals to Gama.