Air Methods is to acquire fellow air medical transport provider Rocky Mountain Holdings (RMH) for $28 million in cash. The merger will more than double the size of Air Methods' fleet to 136 helicopters and 19 fixed-wing aircraft and create the largest US air medical services operation.
Provo, Utah-based RMH operates 77 helicopters and six fixed-wing aircraft, serving hospitals in 30 states, while Denver, Colorado-based Air Methods operates 59 helicopters and 13 fixed-wing aircraft, serving hospitals in 18 states. There is almost no overlap between the two networks, the companies say. RMH also has a helicopter maintenance and modification arm, while Air Methods manufactures air medical interiors.
Privately held RMH had a net income of $2.6 million on revenues of $88 million last year, compared with publicly traded Air Methods' $6.6 million in earnings on $92.1 million in sales. Air Methods' revenues increased last year by 22% and profits by 58%, largely due to growth in its community-based and hospital-based air medical operations.
Air Methods has been growing rapidly since acquiring southern California-based Mercy Air in 1997 and St Louis-based ARCH Air Medical Service in 2000. Both community-based programmes were merged and their regional hubs expanded into surrounding markets. Last year, net income from Mercy Air's community-based operations grew by almost two thirds, while earnings from Air Methods' hospital-based operations grew by one-fifth.
The sale is expected to be concluded before the end of August. It includes the possible payment of another $2.6 million if Air Methods meets earnings expectations resulting from the RMH acquisition. Air Methods will finance the deal by issuing debt to a third party.
Source: Flight International
