Air Methods Corporation, a global leader in air medical transportation and air tourism, on March 14 announced that it has entered into a definitive agreement to be acquired by affiliates of American Securities LLC. Under the terms of the agreement, affiliates of American Securities will acquire all outstanding shares of Air Methods for $43.00 per share in cash. This represents a 20.4 percent premium to Air Methods’ stock price of $35.70 on Jan. 31, 2017, prior to press speculation regarding a sale, and a 24.7 percent premium to 30-day volume-weighted average price of $34.49 as of the same date. The transaction, which was unanimously approved by Air Methods’ board of directors, has a total enterprise value of approximately $2.5 billion, including net debt.
“This transaction will enable us to continue to execute against our strategy and strengthen our market position as a global leader in air medical transportation and air tourism,” said Aaron Todd, chief executive officer. “American Securities offers us a great opportunity to continue to invest and pursue long-term growth with greater operational flexibility, and we look forward to working with such a sophisticated private equity investor. Importantly, patients, employees, customers and partners will continue to benefit as we execute against our strategy.”
Air Methods is the largest domestic air medical transport provider in the $5 billion air medical market, serving 48 states with over 300 bases of operations and one of the youngest fleets in the industry. Air Methods also maintains a leading position in the complementary air tourism business, with access to attractive fast-growing end markets. The company’s multi-pronged strategy to drive long-term growth includes a focus on improving the utilization of the company’s assets, growing the company’s air medical footprint in underserved markets and increasing the revenue and profitability of the tourism operations.
“We are pleased to have reached this agreement, which will deliver certain and immediate cash value and a compelling premium to our stock price prior to press speculation for our shareholders,” said C. David Kikumoto, Air Methods’ chairman of the board of directors. “We are confident that today’s announcement represents the best path forward for all of Air Methods’ stakeholders and appreciate the leadership of Morad Tahbaz, the chairman of the Finance & Strategic Planning Committee, who led the board through this process.”
“We strongly believe in Air Methods’ strategic direction and the opportunities to grow the company’s leading positions in the attractive air medical and air tourism markets,” said Marc L. Saiontz, a managing director of American Securities. “We respect the company’s commitment to providing access to patients in the communities that need it the most, with a focus on quality of care and safety in aviation. We look forward to partnering with the Air Methods team to drive value.”
The transaction will be completed through a cash tender offer for all of the outstanding common shares of Air Methods, followed by a merger in which remaining common shares of Air Methods would be converted into the right to receive the same $43 cash per share price paid in the tender offer. Air Methods’ board of directors unanimously recommends that Air Methods shareholders tender their shares in the offer. The transaction is conditioned upon satisfaction of the minimum tender condition, which requires that shares representing more than 50 percent of the Air Methods’ outstanding common shares be tendered, as well as other customary closing conditions, including expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The transaction is expected to close by the end of the second calendar quarter of 2017.
Goldman, Sachs & Co. and Centerview Partners LLC are serving as financial advisors and Paul, Weiss, Rifkind, Wharton & Garrison LLP and Holland & Hart LLP are serving as legal advisors to Air Methods. Weil, Gotshal & Manges LLP is serving as legal advisor to American Securities.
