to Acquire Rocky Mountain Holdings, LLC
DENVER, June 7 /PRNewswire-FirstCall/ -- Air Methods Corporation (Nasdaq: AIRM - News), the largest public air medical transportation company, announced today that the Company has entered into a Definitive Purchase Agreement (the Agreement) to acquire 100% ownership of Rocky Mountain Holdings, LLC (RMH). RMH is one of the largest private companies providing air medical transport services in the country and pioneered over thirty years ago the first hospital-based air medical service program. Similar to Air Methods, RMH provides these services under both the community-based and hospital-based models, utilizing a fleet of over 80 helicopters and fixed-wing aircraft. RMH operates its community-based programs under the LifeNet brand. Headquartered in Provo, Utah, RMH has significant maintenance and overhaul operations in Provo and in Greenville, South Carolina. In addition, RMH maintains a national dispatch and communications center in Omaha, Nebraska. The acquisition will make Air Methods the largest provider of air medical services in the United States with operations in 31 states and a fleet of 136 helicopters and 19 fixed-wing aircraft.
The Agreement provides for a cash purchase price of $28,000,000 due at closing, subject to customary closing and post-closing adjustments. Additional consideration of up to $2.6 million is possible through earn-out provisions set forth in the Agreement which, if earned, would be paid out over the next several years. Closing is anticipated prior to August 31, 2002, but in no event later than October 31, 2002. The consummation of the transaction is subject to various consents and usual and customary closing conditions.
Audited financial results of RMH for the year ended December 31, 2001 reflect net income of $2.6 million from revenue of $88 million. Audited book equity exceeded $25.2 million as of December 31, 2001. Long-term debt and outstanding balances on its working capital line of credit aggregate to $44 million as of year end. Air Methods expects to finance the purchase price by issuing a combination of senior and unsecured subordinated notes to a third party. The acquisition upon consolidation is expected to reflect minimal goodwill, after applying purchase-accounting adjustments.
Mr. George Belsey, Chairman and CEO of Air Methods, stated, "We are extremely pleased that we have reached agreement on bringing these two companies together. Our ability to be more responsive to our customers' needs, while achieving greater economies of scale, is greatly enhanced via this combination. With a wider geographical service area, a strong platform for growth over the long-term becomes even more apparent. We look forward to the significant opportunities that this combination provides for our respective customers, employees, and shareholders. Upon completion of our transition plan over the coming months, we anticipate growth of revenue and profits moving forward."
Mr. J. Russell Spray, Chairman and CEO of RMH, stated, "We are excited at the prospect of the combination of our two companies and are confident that this opportunity is a necessary process that enables us to improve our financial strength and provide greater operational resources for the future success of our clients." |
