Toronto Helicopters

"Foster tapped str Canada, the local arm of Bankers Trust in New York, as a funding source, and on behalf of Sealand he began negotiations with Len Rutledge to purchase Toronto Helicopters. According to Foster, the negotiations grew complicated because of Rutledge’s apparently endless demands. “We would reach an agreement and get ready to sign off,” Foster says, “and Len would say, ‘Oh, there’s one more thing, and we'd have to deal with that.” Rutledge kept raising issues each time Foster believed they had a deal until, within a day or two of the final deadline, he said again to Foster, “Oh, there’s just one more thing.” “Len,” Foster replied, “I’ll do this ‘one more thing, but if there’s anything else I’m going to advise Craig Dobbin to just walk away and forget everything.” The “one more thing” this time turned out to be the purchase of Rutledge’s Mercedes-Benz. Foster agreed, and negotiations were completed. Sealand was about to purchase its larger rival, leaving Sealand with a sweat-generating 27:1 debt-toequity ratio."

"After spending time and effort on the ou1P pitch, Jones was dispirited when he broke news of the province’s rejection to Craig Dobbin, expecting the Sealand owner to abandon the idea. Dobbin, however, had a different response. “The hell with the contract,” he grinned. “Let’s buy the buggers out and we'll get the contract that way! We'll start with Toronto.” Buy them? Jones thought. What a crazy idea. Toronto Helicopters was comparable to Sealand in size, providing craft and pilots for a wide range of services beyond the ouIP contract. It was also a very profitable company. What’s more, John Lecky had been attempting to purchase Toronto from company president Len Rutledge for some time; each effort was turned down flat. Why should Rutledge look with favour on Sealand’s offer? One of Craig Dobbin’s most popular aphorisms was “Never take no for an answer,” and he instructed Jones to contact Rutledge, set up a meeting and arrange a deal. To Jones’s surprise, Rutledge’s response to his request for a meeting was, “Sure, let’s talk.”"

"Dobbin began working on a deal to acquire Rutledge’s firm, turning to Robert Foster’s Capital Canada for assistance. To Foster, the purchase of Toronto Helicopters by Dobbin’s teetering-near-the-edge Sealand Helicopters made a good deal of sense. “Toronto Helicopters was very profitable, which meant it was paying a lot of taxes,” Foster points out, “and one way you value a company is against its aftertax income which, in this case, reduced its value to the seller.” Meanwhile, Sealand was losing money and recording substantial depreciation costs against its fleet of Super Puma aircraft, enabling Sealand to shelter Toronto’s enormous income free of tax."

"The action of Bankers Trust, Jones believed, was akin to extortion, costing Sealand millions of dollars more than anticipated. But there was no backing out. He agreed to the higher interest rate, new terms were drafted, an agreement was signed, and the deal was completed. Craig Dobbin was furious over the actions of Bankers Trust, of course. In retrospect, however, the purchase of Toronto Helicopters proved a major step in transforming the company into a global powerhouse. With Toronto Helicopters rolled into Sealand and its cash flow solving many of Sealand’s liquidity concerns, Craig Dobbin’s eyes brightened at the prospect of the next step in expanding his company, this one even more audacious. One morning shortly after the deal to purchase Toronto Helicopters was completed, Craig Dobbin strolled into Robert Foster's Toronto office. “Robert,” he said, “I want you to get on a plane, fly to Calgary and buy Okanagan Helicopters for me.”"

"Robert Foster made his pitch to potential investors based in part on the performance of recently acquired Toronto Helicopters. The addition to Sealand was an established, well-run organization whose steady cash flow promised to alleviate Sealand’s fiscal problems. Adding Okanagan would make Sealand a healthy operation capable of riding out future financial difficulties. The response from Bay Street investors was decidedly cool; as J.C. Jones put it, “Everywhere we went we got sand kicked in our faces.”"