David French

NEW YORK (Reuters) – Stonepeak is in advanced talks to acquire Air Transport Services (NASDAQ:) Group, a provider of aircraft leasing and cargo transportation services, for about $3.1 billion, including debt, people familiar with the matter said on Sunday.

The New York investment firm is expected to pay $22.50 per share of the company, known as ATSG, a premium of almost 30% over Friday’s closing price, the sources said, asking not to be identified because the discussions are confidential.

If the talks are successful, the deal could be announced as early as Monday, the sources added.

Stonepeak and ATSG did not immediately respond to requests for comment.

As factory-to-home retailers such as Temu, Shein and others enhance traffic to online stores and brick-and-mortar retailers offer consumers faster delivery times, air cargo transportation has become an imperative part of logistics for many corporations. This has boosted the prospects of freight carriers like ATSG, making them attractive acquisition targets.

Founded in 1980, ATSG has its roots in the express transportation operator known as Airborne Freight Corporation. In 2003, DHL acquired Airborne’s ground operations, excluding its airline and aircraft maintenance business, which eventually became ATSG.

The Wilmington, Ohio-based company, which counts Amazon (NASDAQ:) as one of its key customers, is a leading lessor of mid-size freighters with a fleet of 134 aircraft, including Boeing (NYSE:) 767 and Airbus A321 aircraft.

It also provides air cargo transportation and aircraft maintenance services to domestic and foreign airlines and currently employs 5,300 people, according to its website.

In the quarter ended June 30, ATSG reported an 8% decline in revenue to $488 million before reporting a pre-tax loss of $7 million as some key customers leased fewer aircraft. The company said it expects demand to enhance in the coming quarters as macroeconomic conditions improve.

ATSG is scheduled to release third-quarter results on Friday.

New York-based Stonepeak, which specializes primarily in infrastructure and real estate, has about $70 billion in assets under management, according to its website.

Last year, Stonepeak agreed to acquire container lessor Textainer Group in a deal worth $7.4 billion in enterprise value. Stonepeak is also an investor in Lineage, a frigid storage operator whose shares began trading in New York after the company’s initial public offering in July.