Cargojet and Amazon enter strategic agreement

Cargojet and Amazon entered (23-Aug-2019) a strategic agreement, under which Cargojet will issue warrants to Amazon to purchase variable voting shares that will vest based on the achievement of commercial milestones related to Amazon's business with Cargojet. Cargojet expects the agreement to generate additional revenue growth and be meaningfully accretive to earnings and cash flow. Cargojet will issue the warrants to Amazon in two tranches, the first of which allows Amazon to acquire up to 9.9% of Cargojet's variable voting shares at CAD91.78 (USD68.96) per share. The first tranche of warrants will vest over a period of 6.5 years, tied to the delivery by Amazon of up to CAD400 million (USD300.6 million) in business volumes during the period. Amazon will receive additional warrants to acquire up to an additional 5% of Cargojet's variable voting shares with vesting tied to the delivery by Amazon of up to an additional CAD200 million (USD150.3 million) in business volumes after the first tranche of warrants is fully vested. The vesting period for the second tranche of warrants will continue for one additional year, making the aggregate term of all the warrants equal to 7.5 years from the date of the agreement. The agreement is in addition to the parties' existing commercial arrangement for overnight air cargo services and charters in Canada. [more - original PR]