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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowIndianapolis-based Republic Airways Holdings plans to acquire Midwest Airlines for $31 million, the local airline announced today.
Republic will buy Milwaukee-based Midwest from TPG Capital, a Fort Worth, Texas-based private equity firm. The transaction is subject to regulatory approvals and is expected to close in four to six weeks.
Republic will pay TPG $6 million in cash, plus a $25 million, five-year note, which may be converted to Republic stock at $10 per share. In return, Republic will receive 100-percent ownership of Midwest and TPG’s $31 million secured note from Midwest.
TPG also will receive the right to nominate a member to Republic’s board of directors.
“This acquisition will enhance the strategic positioning of Republic Airways,” Republic CEO Bryan Bedford said in a prepared statement. “Midwest has built a strong brand, a loyal base of customers and dedicated team of employees.”
Under the agreement, Midwest will become a subsidiary of Republic Airways, with the Midwest brand continuing. Midwest’s Boeing 717s will be replaced with Embraer 190 aircraft, improving Midwest’s ability to offer nonstop service to key destinations important to its frequent flyers, Republic said.
This is the second airline acquisition Republic has announced this week. Yesterday, the company said it was offering to buy Denver-based Frontier Airlines for $109 million and take it out of bankruptcy.
Midwest is a 25-year-old airline that has struggled recently. Last year, it cut more than half of its 3,400 employees and reduced the number of cities it served by nonstop flights from Milwaukee from 50 to 42.
Republic owns Chautauqua Airlines, Republic Airlines and Shuttle America. Its airlines offer scheduled passenger service on roughly 1,200 flights daily to 101 cities in 37 states, Canada and Mexico.
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