PROMONTORIA HOLDING 264 B.V. IS LAUNCHING AN OFFERING OF SENIOR SECURED NOTES, COMPRISED OF €340 MILLION FIXED RATE SENIOR SECURED NOTES DUE 2027, $400 MILLION FIXED RATE SENIOR SECURED NOTES DUE 2027 AND €250 MILLION FLOATING RATE SENIOR SECURED NOTES DUE 2027.

PARIS, Jan. 31, 2022 /PRNewswire/ --

THIS ANNOUNCEMENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OR INVITATION TO SELL OR ISSUE, OR ANY SOLICITATION OF AN OFFER TO PURCHASE OR SUBSCRIBE FOR, ANY SECURITIES OF PROMONTORIA HOLDING 264 B.V.

NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA, THE UNITED STATES OF AMERICA OR ANY OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO. PLEASE SEE THE IMPORTANT NOTICES AT THE END OF THIS ANNOUNCEMENT.

Promontoria Holding 264 B.V. (the "Issuer") today announced that it has launched an offering of  senior secured notes, comprised of €340,000,000 fixed rate senior secured notes due 2027, $400,000,000 fixed rate senior secured notes due 2027 and €250,000,000 floating rate senior secured notes due 2027 (collectively, the "Notes"). The proceeds from the offering will be used, to (i) refinance the acquisition of Mercury Air Cargo Services, LLC, Mercury Air Cargo, LLC and Maytag Aircraft LLC; (ii) redeem all of the Issuer's outstanding €400,000,000 6¾% Senior Secured Notes due 2023 and €260,000,000 Senior Secured Floating Rate Notes due 2023; (iii) fund cash and cash equivalents to its balance sheet and (iv) pay the fees and expenses in connection with the foregoing. The Notes will be senior secured obligations of the Issuer and will be secured by shares in the Issuer and certain material bank accounts and receivables of the Issuer on the issue date and subsequently guaranteed and further secured by shares, certain material bank accounts and receivables of the guarantors within 120 days following the issue date.

Recent Developments

Our revenues (excluding airport fees) for the three months ended December 31, 2021 amounted to approximately €429 million compared with €292 million for the same period in 2020 and €359 million for the same period in 2019, representing an increase of approximately €137 million or 47.0% year on year compared to 2020 and an increase of approximately €70 million or 19.3% year on year compared to 2019 (24% on a constant currency basis). This was largely driven by continued strength in our cargo handling business, which was bolstered by increases in trading volumes across all of our regions (with total tonnes handled increased by 12% for the three months ended December 31, 2021 and 7% for the year ended December 31, 2021 compared to the same periods in 2019). Underlying volume growth in cargo handling compared to 2019 was compounded by the positive impact of new contract wins. Robust volumes, a favorable revenue mix with strong storage revenues and productivity gains resulted in a cargo field contribution margin for the three months ended December 31, 2021 which was greater than for the same period in 2020 and 2019. Quarterly revenues were also boosted by an ongoing recovery in ground handling, primarily driven by volumes recovering close to pre-pandemic levels in North America and a strong year over year increase in revenues in South America and Europe. Our ground handling field contribution margin for the three months ended December 31, 2021 improved significantly compared to the three months ended September 30, 2021, despite a €2 million loss related to a Brazilian customer ceasing operations domestically.

Our Adjusted EBITDA for the three months ended December 31, 2021, amounted to approximately €50 million, representing an increase of approximately €23 million or 87.3% from the €27 million recorded in the same period in 2020 and an increase of approximately €18 million or 54.6% from the €32 million recorded in the same period in 2019. Our Adjusted EBITDA margin for the three months ended December 31, 2021 was approximately 11.7%, an improvement from the Adjusted EBITDA margin of 9.2% for the same period in 2020 and 9.0% from the same period in 2019.

For the twelve months ended December 31, 2021, our revenues (excluding airport fees) amounted to approximately €1,382 million compared with €1,070 million for the same period in 2020, representing an increase of approximately €312 million or 29.2% year on year. For the twelve months ended December 31, 2021, our Pro forma revenues amounted to approximately €1,567 million compared with €1,218 million for the same period in 2020, representing an increase of approximately €349 million or 28.7% year on year (with approximately €185 million additional pro forma revenues from acquisitions in 2021). For the twelve months ended December 31, 2021, Adjusted EBITDA amounted to €138 million (10.0% margin) compared to €37 million (3.5% margin) for the same period of 2020, representing an increase of approximately €101 million or 272.2% year on year. For the twelve months ended December 31, 2021, Pro forma Adjusted EBITDA amounted to €176 million (11.2% margin) compared to €62 million for the same period of 2020, representing an increase of approximately €114 million (5.1% margin) or 182.9% year on year (with approximately €1 million from discontinued operations and €37 million from acquisitions). For the twelve months ended December 31, 2021, Pro forma further Adjusted EBITDA amounted to €182 million (with approximately €2 million from group initiatives and €4 million in net synergies).

Total revenues and Adjusted EBITDA for Mercury for the twelve months ended December 31, 2021 were approximately €120 million and €28 million (23.4% margin), respectively. Mercury's strong performance for the three months ended December 31, 2021 (compared to the same period in 2020) was driven by sustained increases in cargo volumes, which benefited from strong United States imports from Asia and structural growth in e-commerce, along with strong storage revenues. Maytag experienced performance and growth consistent with prior years and the second and third quarters of 2021. 

Our cash and cash equivalents and marketable securities as at December 31, 2021 were €158 million including cash impact from the Mercury Acquisition and €153 million as further adjusted for the Transactions.

The financial results for the three month and the twelve month periods ended December 31, 2021 are derived from preliminary management accounts and have not been audited, reviewed or verified by our independent auditors. During the course of our financial statement closing and audit process for the year ended December 31, 2021, we could identify items that would require adjustments to be made and which could affect the results of operations for the periods presented. Those procedures for such period have not been commenced and the operating results for such period may be different than the performance and trends indicated by the financial results for the three months ended December 31, 2021 and such changes may be material. The information for the three months ended December 31, 2021 should not be regarded as an indication, forecast or representation by us or any other person regarding our financial performance for the three months ended December 31, 2021.

Pro Forma Consolidated Financial Information

The Unaudited Pro Forma Financial Information gives effect to the acquisition of the Mercury Air Group (the "Mercury Acquisition"), the acquisition of IAS Logistics DFW, LLC (the "Pinnacle Acquisition") and certain discontinued operations of WFS. The Unaudited Pro Forma Financial Information included herein is not necessarily indicative of what our combined balance sheet or income statement, would have been if the Mercury Acquisition, the Pinnacle Acquisition and the exclusion of the discontinue operations had been completed as of the dates indicated, nor do they purport to project the future financial position or operating results of the combined company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The Unaudited Pro Forma Financial Information is presented for illustrative purposes only and does not reflect the costs of any integration activities or cost savings or synergies that may be achieved as a result of the Mercury Acquisition, the Pinnacle Acquisitions and the exclusion of the WFS discontinued operations.

Unaudited pro forma condensed income statement for the twelve months ended September 30, 2021

Reconciliation from pro forma Operating Income to pro forma EBITDA and pro forma Adjusted EBITDA for the twelve months ended September 30, 2021

Explanatory Notes
A.  Represents:

• the historical interim unaudited consolidated income statement of Pinnacle for the twelve months ended September 30, 2021, converted into euros at a rate of $1.1954 to €1.00; and
• the unaudited income statement, derived from the Management Accounts of Cargo (including Mac Cargo Handling at 100%) and Maytag business units for the twelve months ended September 30, 2021, converted into euros at a rate of $1.1954 to €1.00.

B.  Represents the exclusion of the WFS Discontinued Operations (Connecting Bag Services and Bag Flight Services). 
C.  Pro forma gross margin should be viewed as indicative only since Pinnacle and Mercury expenses may be classified differently from WFS.

Unaudited pro forma condensed income statement for the year ended December 31, 2020

Reconciliation from pro forma Operating Income to pro forma EBITDA and pro forma Adjusted EBITDA for the year ended December 31, 2020

Explanatory Notes
A.  Represents:

• the historical audited consolidated statement profit or loss of Pinnacle for the year ended December 31, 2020, converted into euros at a rate of $1.1422 to €1.00; and
• the unaudited income statement of Cargo (including Mac Cargo Handling at 100%) and Maytag business units for the twelve months ended December 31, 2020, converted into euros at a rate of $1.1422 to €1.00.

B.  Represents the exclusion of the WFS Discontinued Operations (Connecting Bag Services and Bag Flight Services). 
C.  Pro forma gross margin should be viewed as indicative only since Pinnacle and Mercury expenses may be classified differently from WFS.

Unaudited pro forma condensed income statement for the year ended December 31, 2019

Reconciliation from pro forma Operating Income to pro forma EBITDA and pro forma Adjusted EBITDA for the year ended December 31, 2019

Explanatory Notes
A.  Represents:

• the unaudited income statement, derived from the Management Accounts of Pinnacle for the twelve months ended December 31, 2019, converted into euros at a rate of $1.1195 to €1.00; and
• the unaudited income statement, derived from the Management Accounts of Mercury Air Group Inc. for the twelve months ended December 31, 2019, converted into euros at a rate of $1.1195 to €1.00.

B.  Represents the exclusion of the WFS Discontinued Operations (Connecting Bag Services and Bag Flight Services).
C.  Pro forma gross margin should be viewed as indicative only since Pinnacle and Mercury expenses may be classified differently from WFS. 

Unaudited pro forma condensed income statement for the nine months ended September 30, 2021

Reconciliation from pro forma Operating Income to pro forma EBITDA and pro forma Adjusted EBITDA for the nine months ended September 30, 2021

Explanatory Notes
A.  Represents:

• the historical interim unaudited consolidated statement profit or loss of Pinnacle for the nine months ended September 30, 2021, converted into euros at a rate of $1.1962 to €1.00; and
• the unaudited income statement, derived from the Management Accounts of Cargo and Maytag business units for the nine months ended September 30, 2021, converted into euros at a rate of $1.1962 to €1.00.

B.  Represents the exclusion of the WFS Discontinued Operations (Connecting Bag Services and Bag Flight Services).
C.  Pro forma gross margin should be viewed as indicative only since Pinnacle and Mercury expenses may be classified differently from WFS.

Unaudited pro forma income statement for the nine months ended September 30, 2020

Reconciliation from pro forma Operating Income to pro forma EBITDA and pro forma Adjusted EBITDA for the nine months ended September 30, 2020

Explanatory Notes
A.  Represents:

• the historical interim unaudited consolidated statement profit or loss of Pinnacle for the nine months ended September 30, 2020, converted into euros at a rate of $1.1250 to €1.00; and
• the unaudited income statement, derived from the Management Accounts of Cargo and Maytag business units for the nine months ended September 30, 2020, converted into euros at a rate of $1.1250 to €1.00.

B.  Represents the exclusion of the WFS Discontinued Operations (Connecting Bag Services and Bag Flight Services).
C.  Pro forma gross margin should be viewed as indicative only since Pinnacle and Mercury expenses may be classified differently from WFS.

Unaudited pro forma balance sheet as of September 30, 2021

Explanatory Notes
A.  Represents:

• the audited balance sheet of Mercury Air Group Inc. for as of September 30, 2021, converted into euros at a rate of $1.1579 to €1.00; and
• the unaudited balance sheet, derived from the Management Accounts of the Excluded Legal Entities from Mercury Air Group Inc. as of September 30, 2021, converted into euros at a rate of $1.1579 to €1.00.

B.  Represents the preliminary purchase price allocation of the Mercury Group Air, Inc. The enterprise value of the Mercury Acquisition was $245 million (€217.1 million). The acquisition was financed with the Bridge Facility of €225 million and cash on balance sheet of €6.1 million. No additional interest costs related to the Bridge Facility were reflected in pro forma income statement for the periods presented herein, as the Bridge Facility will be repaid and cancelled in full in connection with the Transactions. Total transaction fees amounted to €16.5 million plus €5.6 million related to financing fees.
C.  As of September 30, 2021, we had €25.9 million drawn under our Existing Revolving Credit Facility, which was repaid within a month with cash on balance sheet.

About WFS 
Founded in 1984, WFS (www.wfs.aero) is the world's largest air cargo handler and one of the leading providers of ground handling and technical services with annual revenues of €1.4 billion. As of December 31, 2021, its approximately 30,000 employees serve around 300 customers globally at 165 major airport stations in 17 countries on five continents.

Cautionary Statement 
This press release is for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to buy the Notes, nor shall it constitute an offer, solicitation or sale in any jurisdiction in which, or to any person to whom, such offer, solicitation or sale would be unlawful. The Notes will be offered in a private placement only to qualified institutional buyers pursuant to Rule 144A and non-U.S. persons pursuant to Regulation S under the U.S. Securities Act of 1933, as amended (the "Securities Act"), subject to prevailing market and other conditions. There is no assurance that the offering will be completed or, if completed, as to the terms on which it is completed. The Notes have not been registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or unless pursuant to an applicable exemption from the registration requirements of the Securities Act and any other applicable securities laws.

This announcement does not constitute and shall not, in any circumstances, constitute a public offering nor an invitation to the public in connection with any offer within the meaning of, within the European Economic Area (the "EEA") the Prospectus Regulation (2017/1129) (the "Prospectus Regulation"), and, within the UK, Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (the "EUWA") (the "UK Prospectus Regulation"). The offer and sale of the Notes will be made pursuant to an exemption under the Prospectus Regulation or UK Prospectus Regulation from the requirement to produce a prospectus for offers of securities.

Manufacturer target market (MIFID II product governance) is eligible counterparties and professional clients only (all distribution channels). No PRIIPs key information document (KID) has been prepared as not available to retail in EEA and UK.

This announcement is made to and directed only at persons who (i) are outside the United Kingdom, (ii) are investment professionals, as such term is defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"), (iii) are persons falling within Articles 49(2) (a) to (d) of the Order, or (iv) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any Notes may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as "relevant persons").

This announcement is not directed or otherwise intended to be made available to and should not be made available to any retail investors in the European Economic Area. For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of MiFID II; or (ii) a customer within the meaning of Directive 2016/97/EU, as amended (the "Insurance Distribution Directive"), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II. No key information document required by Regulation (EU) No 1286/2014 (as amended, the "PRIIPs Regulation") for offering or selling the securities or otherwise making them available to retail investors in the European Economic Area has been prepared and therefore offering or selling the securities or otherwise making them available to any retail investor in the European Economic Area may be unlawful under the PRIIPS Regulation.

This announcement is not directed or otherwise intended to be made available to and should not be made available to any retail investor in the UK. For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client, as defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (the "EUWA"), or (ii) a customer within the meaning of the provisions of the Financial Services and Markets Act 2000 (the "FSMA") and any rules or regulations made under the FSMA to implement Directive (EU) 2016/97, where that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the EUWA. Consequently, no key information document required by Regulation (EU) No 1286/2014 as it forms part of domestic law by virtue of the EUWA (the "UK PRIIPs Regulation") for offering or selling the securities or otherwise making them available to retail investors in the UK has been prepared and, therefore, offering or selling the securities or otherwise making them available to any retail investor in the UK may be unlawful under the UK PRIIPs Regulation.

The investments to which this announcement relates are available only to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such investments will be available only to or will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this announcement or any of its contents. Persons distributing this announcement must satisfy themselves that it is lawful to do so.

The distribution of this announcement may be restricted by law. Persons into whose possession this announcement comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the laws of any such jurisdiction.

Forward-Looking Statements 
This press release includes forward-looking statements. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes, ‟estimates", ‟anticipates", "expects, ‟intends", ‟may", ‟will" or "should" or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts and include statements regarding WFS', the Issuer's or their affiliates' intentions, beliefs or current expectations concerning, among other things, WFS', the Issuer's or their affiliates' results of operations, financial condition, liquidity, prospects, growth, strategies and the industries in which they operate. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Readers are cautioned that forward-looking statements are not guarantees of future performance and that WFS', the Issuer's or their affiliates' actual results of operations, financial condition and liquidity, and the development of the industries in which they operate may differ materially from those made in or suggested by the forward-looking statements contained in this press release. In addition, even if the WFS', the Issuer's or their affiliates' results of operations, financial condition and liquidity, and the development of the industries in which they operate are consistent with the forward-looking statements contained in this press release, those results or developments may not be indicative of results or developments in subsequent periods.

Contact: WFS Investor Relations - investorrelations@wfs.aero