Air Methods Corporation (NASDAQ: AIRM), a global air medical transportation company, has been on the acquisition trail since the late 1990s, announcing 12 deals targeting smaller air ambulance operators. Now it’s a takeover target itself, thanks to activist shareholder Voce Capital Management LLC.
Voce Capital, and its managing director J. Daniel Plants, had been calling for Air Methods management to put the company on the block as far back as 2015. In February 2017, the investment firm launched a fight for four board seats and publicly criticized AIRM’s financial returns and “a multi-year syndrome of operational, strategic and governance failures.”
Air Methods engaged Goldman Sachs & Company in January 2017 to help it explore a sale. On March 14, private equity investor American Securities LLC agreed to acquire Air Methods for $43.00 per share in cash, a 20.4% premium to its stock price of $35.70 on January 13, 2017, prior to press speculation that a sale may be imminent.
The total deal value of approximately $2.5 billion includes $906.7 million of debt. Multiples work out to 2.1x revenue and 8.6x EBITDA.
Leonard Green & Partners made a minority investment in the transaction.
Currently, Air Methods serves 48 states with more than 300 bases of operations. Since 1997, it has announced 12 acquisitions, five of which disclosed prices, for a total of $313.9 million. The largest, at $200 million, was for Omniflight Helicopters, Inc., based in Addison, Texas, in August 2011.
The most recent deal was announced in October 2015, targeting San Antonio AirLIFE, which was jointly owned by a consortium of local hospital operators, Baptist Health System of San Antonio, Tenet Healthcare (NYSE: THC) and University Health System.
Now that it’s been taken private, Air Methods’ CEO Aaron Todd says the company is still looking for acquisitions as a path to long-term growth, but has greater operational flexibility.
There’s at least one other targets out there with a sizable platform. Air Medical Group Holdings changed hands in March 2015, when then-owners Bain Capital and Brockway Moran & Partners sold the company to KKR & Co. LP (NYSE: KKR) for an undisclosed price. Air Medical had purchased REACH Air Medical Services in December 2012, also for an undisclosed price. That company had 13 helicopter bases and one airplane base in California.