Canada's second-largest carrier WestJet is to be acquired by Toronto-based private equity firm Onex for around C$5 billion ($3.7 billion), including debt.
The airline says it will be a privately-held company after the deal closes, and continue to be based in Calgary.
Onex and its affiliated funds will acquire all of WestJet's outstanding shares for C$31 per share, a 67% premium over the 10 May closing price of C$18.52 on the Toronto Stock Exchange. The proposed price is a 63% premium to the airline's 20-day volume-weighted average trading price.
Subject to approvals from shareholders and Canadian regulators, the deal will close in "the latter part of 2019 or early 2020", the carrier expects.
The transaction will be led by Onex Partners, Onex's private equity platform which leads larger investments. Onex previously owned Spirit AeroSystems, before taking the manufacturer public in November 2006. Onex sold its remaining shares in 2014.
"We are delighted to continue the journey of building an airline based on a growing network, providing competitive airfares and more choice to, from and within Canada, for communities large and small. Integral to this relationship is a commitment to our employees, and our unique ownership-driven culture," states WestJet chief executive Ed Sims.
Onex approached the carrier in March 2019, prompting the formation of a special committee of independent directors to advise the airline's board on the proposed purchase by Onex.
"The WestJet board of directors, having received and considered the recommendation of the special committee, determined that the transaction is in the best interests of WestJet and unanimously recommends that WestJet shareholders vote in favour of the transaction at the special meeting of shareholders to be held to approve the transaction," says the carrier.
WestJet's directors and executive officers have committed to vote in favour of the transaction.
CIBC Capital Markets is advising WestJet on the deal, while Bank of America Merrill Lynch provided financial advisory services to WestJet's board.
WestJet and its regional subsidiary WestJet Encore operate a fleet of 162 aircraft, in addition to 13 Boeing 737 Max 8s in storage, Cirium's Fleets Analyzer shows.
The airline began operations in 1996.
"I am particularly pleased that WestJet will remain headquartered in Calgary and will continue to build on the success that our 14,000 WestJetters have created. Onex's aerospace experience, history of positive employee relations and long-term orientation makes it an ideal partner for WestJetters, and I am excited about our future," states founder and chairman Clive Beddoe.