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The nation's largest helicopter air ambulance provider, Air Methods, has agreed to be acquired by affiliates of investment firm American Securities Corporation for $2.5 billion in cash plus net debt, the company announced yesterday.
The purchase price is the equivalent of $43 per share, a 20.4 percent premium to the traded share price of $35.70 on Jan. 31, 2017. Air Methods had been under pressure from some shareholders to take measures to increase the value of its stock, including exploring the possible sale of the company. The deal is expected to close by the end of the second calendar quarter of 2017.
“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," said Air Methods CEO Aaron Todd.
Air Methods has seen its revenues increase in recent years, but earnings have remained relatively flat. In addition to air ambulances, Air Methods also operates two heli-tourism companies and the United Rotorcraft completion and modification business.
The proposed $2.5 billion sale of Air Methods could face some turbulence. The nation's largest helicopter air ambulance provider agreed in March to be acquired by affiliates of investment firm American Securities for cash plus net debt. The purchase price is the equivalent of $43 per share, a 20.4-percent premium on the traded share price of $35.70 on Jan. 31, 2017. Air Methods had been under pressure from dissident shareholders to take measures to raise the value of its stock, possibly by selling the company. The deal is expected to close by the end of this year's second quarter.
Air Methods CEO Aaron Todd said, “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." As a publicly traded company, Air Methods has seen its revenue increase in recent years, but earnings have remained relatively flat. In addition to air ambulances, Air Methods also operates two helitourism companies—Blue Hawaiian and Sundance Helicopters—and the United Rotorcraft completion and modification business. Air Methods operates in 48 states from 300 bases with 500 helicopters and fixed-wing aircraft.
However, by last month at least half a dozen prominent national law firms had lined up on behalf of shareholders to potentially oppose or at the very least attempt to negotiate better terms for the sale and have launched “investigations” into “whether the company’s board of directors failed to satisfy its duties to shareholders, including whether the board adequately pursued alternatives to the acquisition and whether the board obtained the best price possible for the company’s shares of common stock,” according to a public notice from the law firm of Brower Piven.
Air Methods' stock price has been volatile, trading as high as $59.81 in August 2014 and as low as $26.50 last October. Reports surfaced in the financial press in February that Air Methods had engaged investment banking firms to help it explore a possible sale, and last year the company began deferring new aircraft deliveries from Bell Helicopter and, this year, other OEMs.