Toronto — Cargojet soared to a record high after Amazon signed a deal that will allow the online retailer to buy a stake in the Canadian cargo carrier.

Under the agreement, Ontario-based Cargojet will issue warrants to Amazon in two tranches to purchase variable voting shares that will vest based on the achievement of certain commercial milestones.

“Cargojet has been a key player in our Canadian middle-mile operations for several years,” said Adam Baker, vice-president of global transportation at Amazon, in a statement. “We’re thrilled to build a longer-term relationship that will allow us to provide even faster service to Amazon customers in Canada.”

Cargojet surged as much as 20%, the biggest climb since February 2014. The first tranche will allow Amazon to buy up to 9.9% of Cargojet’s shares at an exercise price of C$91.78 each, a discount to the C$106 price in Toronto after the gain on Friday. This will vest over six-and-a-half years, tied to the delivery by Amazon of up to C$400m ($300) in business volumes to Cargojet over that time.

The second tranche for an additional 5% of Cargojet’s shares has a vesting tied to the delivery by Amazon of up to C$200m in additional business after the first tranche of warrants is fully vested. The exercise price of this tranche will be set two years after the date of the agreement.

Cargojet said the agreement will generate additional revenue growth and be meaningfully accretive to earnings and cash flows over time. Its shares have climbed 28% this year, compared with a 13% gain for the S& P/TSX composite index.

CIBC Capital Markets advised Cargojet on the deal.

With Divya Balji