Air Methods Completes Acquisition of Rocky Mountain Holdings, LLC
PR NEWSWIRE - October 17, 2002 06:01
DENVER, Oct 17, 2002 /PRNewswire-FirstCall via COMTEX/ -- Air Methods Corporation (Nasdaq: AIRM), the largest air medical transportation company in the United States, announced today that the Company has completed its acquisition of Rocky Mountain Holdings, L.L.C. (RMH).
The cash purchase price for 100 percent of the equity of RMH was $28 million. This amount was increased to $33.6 million to reflect increases in net equity since December 31, 2001, which also decreased assumed indebtedness at closing. Assumed long-term debt and outstanding balances on RMH's working capital line of credit, net of cash, aggregated to $36.2 million as of September 30, 2002. Additional consideration of up to $2.6 million is possible through earn-out provisions set forth in the Definitive Purchase Agreement which, if earned, would be paid out over the next several years.
Unaudited financial results of RMH for the twelve months ended September 30, 2002, reflect net income of $7.0 million from revenue of $98.9 million. Unaudited trailing twelve-month earnings before interest, income taxes, and depreciation and amortization (EBITDA) for the same period were $14.0 million. Unaudited book equity for RMH exceeded $30.6 million as of September 30, 2002.
The purchase price was financed in part through the issuance of subordinated notes for $23 million. The unsecured notes provide for quarterly payments of interest only at 12 percent per annum, with maturity of principal in five years from date of closing. As additional interest, the Company issued warrants to the lenders to purchase 443,224 shares of Air Methods Common Stock at $.06 per share.
To finance the remainder of the purchase price and related closing costs and to provide working capital for the combined entities, Air Methods originated a $35 million revolving credit facility secured by the consolidated accounts receivable, inventories, unencumbered equipment (excluding aircraft), and general intangibles. The term of this facility is four years, with a floating interest rate at prime. None of Air Methods' unencumbered aircraft were encumbered in the acquisition.
Mr. George Belsey, Chairman and CEO of Air Methods, stated, "We are extremely pleased to have completed this acquisition. The combined companies are now able to better serve our customers given our aggregate talents and strengths, geographical coverage, and diverse fleet. Upon completion of our integration plan over the next two quarters, we anticipate that the combination will be accretive to earnings as savings, efficiencies, and growth opportunities become realized. We believe the combined companies present a very exciting future for our customers, employees, and shareholders." |
