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Alaska Air Agrees to Buy Horizon for $68 Million

November 20, 1986|ROBERT E. DALLOS | Times Staff Writer

NEW YORK — Alaska Air Group, which owns Alaska Airlines and which acquired Long Beach-based Jet America Airlines earlier this year, said Wednesday that it will buy Horizon Air Industries for about $68 million in cash.

Alaska Air said Horizon, the nation's fourth-largest commuter airline, will continue to be operated independently with its own management and work force. The 5-year-old Horizon serves 27 cities in six Western states from hubs in Seattle; Portland, Ore.; Boise, Ida., and Spokane, Wash. Alaska Airlines, if Jet America is included, serves 38 cities.

Alaska Airlines and Horizon both serve several of the same cities, including Seattle, Portland and Spokane, but no decisions have been made on any consolidations, an Alaska Air spokesman said.

Horizon, which was launched with two aircraft, now has two jets and 35 propeller-driven planes. Its work force has grown to about 1,000 today from 70 people at the beginning. In September, 1981, it carried 2,700 passengers; this August, it served 106,846. It operates 58 flights a day between Seattle and Portland.

Bruce R. Kennedy, chairman and chief executive of Alaska Air, said in a telephone interview that the company acquired Horizon largely for the passengers it would feed into Alaska Airlines' north-south routes from small and medium-size cities in the Pacific Northwest. "These are cities," he said, "which we would not dream of serving with jets. It is a highly qualified regional feeder which will bolster traffic in our hub cities."

Under terms of the agreement, Alaska Air will buy for cash all outstanding shares of Horizon common stock at $9.50 a share and all outstanding preferred stock at $12.34 per share. Milton G. Kuolt II, the major shareholder of Horizon, has agreed to sell his shares, representing 50% of the outstanding common stock, at the $9.50-a-share figure. Horizon has also granted Alaska Air an option to buy up to 2.5 million authorized but unissued shares of Horizon common stock for $9.50 each.

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