Tim Sheehy, the Republican candidate anticipated to influence the political landscape in Montana and the US Senate, has experienced $180 million in losses over the past five and a half years while leading Bridger Aerospace, a Nasdaq-listed aerial firefighting company. There is concern that Bridger Aerospace might face financial difficulties between Sheehy’s potential victory in the upcoming election and his expected entry into the Senate in January. With the US fire season concluding, the financial results, which will indicate Bridger’s sustainability until the next season, are expected later in November.
This situation brings into question what constitutes success or failure for the historical advocate of American business, the Republican Party. At 37, the former Navy SEAL has placed Bridger at the center of his campaign as a “job creator” in a race that could determine control of the US Senate and, subsequently, influence the agenda of a Trump or Harris presidency.
Mike Berg, a Republican communications director, attributed Bridger’s challenges to Sheehy’s opponent, the three-term Democratic incumbent Jon Tester, accusing Tester of attempting to undermine Sheehy’s Montana business and disparage his service. Berg insisted these allegations would not alter the election outcome, aligning with opinions expressed by the Wall Street Journal.
Some observers consider Sheehy’s role relevant. After leaving the Navy, Sheehy founded Bridger in 2014 and managed it until July, amassing personal wealth through affiliated side projects. Blackstone, the prominent private equity firm, withdrew $290 million from Bridger in transactions during 2022, resulting in a $10 million bonus for executives, including Sheehy, who was also relieved from a personal debt guarantee.
Chosen for his financial independence, Sheehy contributed $2.5 million to his campaign, deemed one of the most expensive Senate races in history. Wealthy individuals, including Blackstone founder Stephen Schwarzman, have substantially supported the campaign, with a super PAC spending over $17 million in Sheehy’s favor.
Sheehy currently holds a seven-point lead in the Real Clear Polling average and showcases Bridger as a successful venture and one of Montana’s few publicly traded companies. However, Bridger has breached debt covenants, sold stock to maintain minimum cash reserves, and faced auditors expressing “substantial doubt about its ability to continue as a going concern.” Its largest debt is a $160 million municipal bond raised for industrial development, primarily used to refinance previous Blackstone funding.
Sheehy has been embroiled in controversies regarding the circumstances of a gunshot wound, whether from a friendly-fire incident in Afghanistan or a self-inflicted accident in a National Park. He has also faced allegations of altering a contract in civil litigation with former employees, which he has denied.
Bridger went public in January 2023 by merging with a special acquisition vehicle, commonly known as a SPAC. Its market value plummeted from a high of $1 billion on the first trading day in January 2023 to $130 million. Columbia Law School professor John Coffee noted that SPACs, initially meant as a quicker, less expensive alternative to initial public offerings, have become a platform for questionable business ventures.
The company operates a limited fleet of aircraft to combat forest fires, typically on contracts with the US Fire Service. Financial forecasts in its 2022 bond prospectus overestimated future revenues and underestimated expenses. The seasonal nature of firefighting has, at times, resulted in interest expenses exceeding revenues in certain quarters.
Despite challenges, a Bridger spokesperson asserted the company’s financial strength and growth, claiming record performance and contract awards in 2023 with expectations to build on this success in 2024. Sheehy’s campaign did not respond to requests for comment, while Blackstone emphasized its commitment to supporting Bridger’s mission against wildfires and clarified that staff donations to political campaigns were personal.
Sheehy’s side ventures include investing in pilot training businesses and selling aircraft to Bridger, including contracts worth $1.7 million annually. A person familiar with Bridger claimed the high valuation of 15-year-old planes, priced 60 percent above industry estimates, reflected the value of advanced avionics on the aircraft.
The successful spinoff of Ascent Vision, a specialist in aerial surveillance and anti-drone technology sold for $350 million in 2020, was among Sheehy’s related businesses. Blackstone invested $105 million in Bridger between 2018 and 2020, acquiring company shares, board seats, and preference shares accumulating interest over time. With Blackstone’s support, Bridger expanded its aircraft and property portfolio and increased revenues.
In 2022, the year before going public, Bridger raised $460 million, with two-thirds utilized to buy out Blackstone’s preference shares, allowing the firm to nearly double its investment while retaining equity. Additional funds repaid insider lending, and fees amounted to $19 million, excluding $10.1 million in bonuses to senior management.
Sheehy, his brother, who chaired Bridger’s board, and another executive invested in $10 million of Bridger debt during the municipal bond issue to instill confidence in potential investors. By the end of 2022, Bridger had lost $42 million with a net debt of $178 million. The SPAC merger in January 2023 raised no new capital, and shareholders simultaneously approved the deal while requesting their money back.
Bridger ended up paying a net $3.6 million for Sheehy to head a Montana public company that lost $77 million that year. In 2023, on September 8, the head of Bridger’s audit committee resigned over issues concerning the committee’s operations. Six days later, Bridger acquired Ignis Technologies, a start-up that had operated from Bridger’s basement, a detail not disclosed in the announcement.
In April, Bridger’s auditor warned of significant concerns about the company’s future due to ongoing losses, negative cash flow, and insufficient liquidity. Blackstone’s Todd Hirsh subsequently resigned from the board, and the firm relinquished its right to appoint replacements. Sheehy departed in July. In August, Bridger reported a $30 million loss for the first half of 2024, with cash reserves of $8.6 million against $25 million in short-term liabilities.
Recently, Bridger’s share price recovered from lows, with increasing investor interest as activity heightened in political prediction markets. This positive sentiment could enable Bridger to secure additional capital to manage its debt and winter cash demands, ensuring continued operations. New CEO Sam Davis informed investors of anticipated sufficient activity from the third quarter fire season to sustain operations until the next one. Financial results to verify this outlook are expected after Montana’s election.