Cargojet Inc. new deal with Amazon to grow business with the retailer
The online retailer will acquire a stake in Cargojet, which provides overnight services moving packages between facilities and to other carrier locations
MISSISSAUGA, Ont. – Cargojet Inc. has signed a new deal with Amazon.com that could see the online retailer acquire a stake in the company which provides overnight air cargo services.
Amazon uses Cargojet’s overnight air network and charter aircraft services to move packages between facilities and to other carrier locations.
Under the agreement, Cargojet will issue warrants to Amazon for variable voting shares that will vest based on commercial milestones related to Amazon’s business with Cargojet.
The first tranche will allow Amazon to buy up to 9.9 per cent of Cargojet’s variable voting shares at an exercise price of $91.78 per share. They will vest over a period of six and a half years, with vesting tied to the delivery by Amazon of up to $400 million in business.
Amazon will also receive additional warrants for up to an additional five per cent of Cargojet’s shares with vesting tied to an additional $200 million in business after the first tranche of warrants is fully vested. The vesting period for the second tranche will run for an additional year.
Cargojet shares closed at $90.67 on the Toronto Stock Exchange on Thursday.