ST. JOHNS, N.L. — A Newfoundland aerospace and defence company that operates one of the largest independent airlines in Eastern Canada has reached a deal to be bought by a Manitoba company.

Winnipeg-based Exchange Income Corp. says the deal to acquire the Provincial Aerospace Group of Companies (PAL) is worth about $246 million and includes a combination of cash and stock.

PAL says it will continue to operate independently under current management at its headquarters in St. Johns, N.L.

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In a statement, company CEO Brian Chafe says the deal will allow PAL to pursue large-scale contracts, including Canadas fixed-wing search and rescue fleet.

“We have built a diverse set of operations which fits in well with EIC’s business model, says Chafe. They recognize how PAL has grown over the years through our multiple revenue streams and have expressed their confidence in our team and their commitment to helping us reach our next phase of growth. Our previous owners helped us build a solid foundation upon which to grow. We are proud of their success and are pleased they selected EIC who will allow us achieve our goals for the future. This is an exciting transaction for PAL and we look forward to being part of the EIC family.”

“We are very excited about the acquisition of PAL,” stated Mike Pyle, CEO of EIC. “They have three strong revenue streams. While the airline business and FBO operations are similar to our existing aviation segment, their aerospace division is a new revenue source for us.

PAL also operates Provincial Airlines, which provides scheduled, charter and cargo services in Newfoundland and Labrador, New Brunswick, Nova Scotia and Quebec.

The deal is expected to close by the end of this year or early next year, pending regulatory approval.

Exchange Income Corp. is a diversified acquisition-oriented company that focuses on sectors including metal manufacturing and aviation services and equipment.