The check courier AirNet Systems Inc. is on the block.
The Columbus, Ohio, company announced it had engaged the Chicago investment bank Brown Gibbons Lang & Co. to “evaluate various strategic alternatives to enhance shareholder value.”
Those options could include selling all or part of the company, refinancing, raising additional capital, or restructuring the company, AirNet said in a press release issued Monday. A spokesman said Wednesday that executives were not available for an interview.
Burt Ely, an independent bank consultant in Alexandria, Va., said there is little doubt that AirNet’s main business is eroding. (AirNet planes also deliver American Banker.)
The company gets 60% of its revenues from delivering paper checks, a business that is inexorably in decline. Consumers are increasingly embracing electronic payments, and this trend is driving up the volume for online bill payments and credit and debit cards while driving down check use.
In addition, banks and billers that receive checks are starting to convert them into electronic files, either check images or automated clearing house payments. That is further reducing the need for AirNet’s fleet of planes.
“AirNet is very publicly having to deal with these issues,” Mr. Ely said.
The Federal Reserve banks released a survey report last month that quantified what most bankers already knew. It found that the banking system processed 36.7 billion checks in 2003, 12.4% less than the 2001 survey found.
There are several indications that the drop-off is accelerating. These include the hugely popular accounts receivable conversion process, which allows billers to convert checks into ACH payments. Nacha, the electronic payments association, has said that about 1.25 billion checks were converted last year, and it anticipates even more this year.
Banks are also starting to clear checks through image exchange systems such as Metavante Corp.’s Endpoint Exchange, Viewpointe Archive Services LLC, or Clearing House Payment Co. LLC’s SVPCo network.
These changes are not lost on AirNet. The company has been attempting to build its nonbanking business, which includes charter passenger flights and delivery of human organs for transplants. In 2003 it began offering check imaging equipment, saying at the time that it was capitalizing on its relationships with financial institutions.
In November, AirNet opted to take a $47 million impairment charge, three times the size of its profit for the past three years. It said $43 million of that was to write down its cargo plane assets in anticipation of a drop in its check-hauling business.
Mr. Ely said: “We’re seeing downsizing in the Fed’s check processing operations, and we’re seeing downsizing in the Fed’s check processing competitors. And one aspect of those changes is shrinkage of the check transport business.”
