Emergency Medical Services Corporation (NYSE:EMS) (“EMSC” or
“the Company”) and Clayton, Dubilier & Rice, LLC (CD&R)
announced today a definitive merger agreement under which an
affiliate of CD&R formed to complete the merger will acquire
EMSC. Under the terms of the agreement EMSC stockholders would
receive, at the closing of the transaction, $64.00 in cash for each
share of EMSC Class A common stock and Class B common stock and
each LP Exchangeable Unit.
The EMSC Board of Directors has unanimously approved the terms
of the definitive merger agreement and has recommended that EMSC
stockholders approve the transaction. Onex Corporation and its
affiliates, the holders of the Company’s LP Exchangeable Units,
have sufficient voting power to approve the merger, and have agreed
to vote in favor of adoption of the merger agreement.
Emergency Medical Services Corporation (EMSC) is a leading
provider of emergency medical services in the United States. EMSC
operates two business segments: American Medical Response, Inc.
(AMR), the Company's healthcare transportation services segment,
and EmCare Holdings Inc. (EmCare), the Company's outsourced
facility-based physician services segment. AMR is the leading
provider of ambulance services in the United States. EmCare is a
leading provider of outsourced physician services to healthcare
facilities. In 2010, EMSC provided services in more than 2,200
communities and 14 million patient encounters nationwide.
William A. Sanger, EMSC Chairman and Chief Executive Officer,
said, “Our partnership with Onex over the past six years has
enabled us to build a world-class healthcare company. In the next
stage of our evolution, EMSC’s agreement with CD&R and the
transition to a privately-held company will greatly enhance our
flexibility and growth opportunities in the future. We are pleased
that with this transaction, we are able to maximize stockholder
return while— with our new global equity partner— further
positioning EMSC to play a significant role in delivering quality,
cost-effective care for our patients in the era of healthcare
reform.”
“EMSC is an exceptionally high quality and successful company
with an outstanding management team and world-class workforce led
by Bill Sanger,” said Richard J. Schnall, a partner at CD&R.
“The Company is poised for continued strong growth due to its
leading market position, operational effectiveness and the value it
brings to its customer base.”
In recent years, the Company has benefited from strong market
trends driven by the aging population, primary care physician
shortages and increased outsourcing of health services. The Company
today enjoys broad revenue and geographic diversification across
the U.S. and a highly stable customer base.
“EMSC has demonstrated the ability to consistently provide
superior patient care and service which is demonstrated by its
long-term customer relationships,” said CD&R partner Kenneth A.
Giuriceo. “We look forward to working with the management team to
enhance the Company’s competitive advantages and build long-term
value for its customers, employees and investors.”
The transaction is expected to close in the second quarter,
subject to customary closing conditions, including regulatory
approvals and approval by the Company’s stockholders. Upon
completion of the transaction, EMSC will become a privately held
company, and its common stock will no longer be traded on the
NYSE.
CD&R has obtained committed financing from Barclays Capital,
Deutsche Bank Securities Inc., BofA Merrill Lynch, affiliates of
Morgan Stanley, RBC Capital Markets and UBS Investment Bank. These
funds, in addition to equity financing from CD&R, will be
sufficient to finance the cash consideration to EMSC stockholders
and the holders of LP Exchangeable Units.
Goldman, Sachs & Co. and BofA Merrill Lynch acted as
financial advisors to EMSC. Kaye Scholer LLP is advising EMSC on
legal matters in connection with the transaction. Barclays Capital,
Deutsche Bank Securities Inc., Morgan Stanley & Co., RBC
Capital Markets and UBS Investment Bank acted as financial
advisors, and Debevoise & Plimpton LLP acted as legal advisor
to CD&R.
EMSC Quarterly Earnings Announcement
The Company noted that with the proposed transaction, it will
not be issuing an earnings release and will not host a conference
call to discuss results for the fourth quarter of 2010. The Company
expects to file its 2010 Annual Report on Form 10-K later in the
month.
About Emergency Medical Services Corporation
Emergency Medical Services Corporation (EMSC) is a leading
provider of emergency medical services in the United States. EMSC
operates two business segments: American Medical Response, Inc.
(AMR), the Company's healthcare transportation services segment,
and EmCare Holdings Inc. (EmCare), the Company's outsourced
facility-based physician services segment. AMR is the leading
provider of ambulance services in the United States. EmCare is a
leading provider of outsourced physician services to healthcare
facilities. In 2010, EMSC provided services in nearly 14.0 million
patient encounters in more than 2,200 communities nationwide. EMSC
is headquartered in Greenwood Village, Colorado. For additional
information, visit http://www.emsc.net.
About Clayton, Dubilier & Rice, LLC
Founded in 1978, Clayton, Dubilier & Rice, LLC is a private
equity firm with an investment strategy predicated on building
stronger, more profitable businesses. The Firm’s professionals
include a combination of skilled investment decision-makers and
seasoned corporate leaders from global businesses such as ABB,
Allstate, BBA Group, Emerson Electric, General Electric, Procter
& Gamble and Unilever, among others. Since inception, CD&R
has managed the investment of approximately $15 billion in 48 U.S.
and European businesses representing a broad range of industries
with an aggregate transaction value of approximately $80 billion.
The Firm has offices in New York and London. For more information,
please visit www.cdr-inc.com.
Additional Information and Where to Find It
In connection with the proposed merger, the Company will file a
preliminary proxy statement with the Securities and Exchange
Commission. When completed, a definitive proxy statement and a form
of proxy will be mailed to the stockholders of the Company. THE
COMPANY’S SECURITY HOLDERS ARE URGED TO READ THE PRELIMINARY PROXY
STATEMENT REGARDING THE PROPOSED MERGER AND, WHEN AVAILABLE, THE
DEFINITIVE PROXY STATEMENT, BECAUSE THEY CONTAIN, OR WILL CONTAIN,
IMPORTANT INFORMATION. Security holders will be able to inspect,
without charge, a copy of the preliminary proxy statement, the
definitive proxy statement (when available) and other relevant
documents filed with the SEC at the Public Reference Room
maintained by the SEC, located at 100 F Street, N.E.,
Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for
more information about the operation of the Public Reference Room.
The preliminary proxy statement, the definitive proxy statement
(when available) and other relevant documents filed with the SEC
are also available at the SEC’s website at http://www.sec.gov.
Participants in Solicitation
The Company and its directors, executive officers and other
members of its management and employees may be deemed to be
participants in the solicitation of proxies from its stockholders
in connection with the proposed merger. Information concerning the
interests of the Company’s participants in the solicitation will be
set forth in the Company’s proxy statement relating to the merger
when it becomes available.
Forward-Looking Statements
Certain statements and information herein may be deemed to be
"forward-looking statements" within the meaning of the Federal
Private Securities Litigation Reform Act of 1995. Forward-looking
statements may include, but are not limited to, statements relating
to our objectives, plans and strategies, and all statements (other
than statements of historical facts) that address activities,
events or developments that we intend, expect, project, believe or
anticipate will or may occur in the future. Any forward-looking
statements herein are made as of the date of this press release,
and EMSC undertakes no duty to update or revise any such
statements. Forward-looking statements are not guarantees of future
performance and are subject to risks and uncertainties. Important
factors that could cause actual results, developments and business
decisions to differ materially from forward-looking statements are
described in EMSC's filings with the SEC from time to time,
including in the section entitled "Risk Factors" in the Company's
most recent Annual Report on Form 10-K and subsequent periodic
reports. Among the factors that could cause future results to
differ materially from those provided in this press release are:
the impact on our revenue of changes in transport volume, mix of
insured and uninsured patients, and third party reimbursement rates
and methods; the adequacy of our insurance coverage and insurance
reserves; potential penalties or changes to our operations if we
fail to comply with extensive and complex government regulation of
our industry; the impact of potential changes in the healthcare
industry generally resulting from legislation currently under
consideration; our ability to recruit and retain qualified
physicians and other healthcare professionals, and enforce our
non-compete agreements with our physicians; our ability to generate
cash flow to service our debt obligations; the cost of capital
expenditures to maintain and upgrade our vehicle fleet and medical
equipment; the loss of one or more members of our senior management
team; the outcome of government investigations of certain of our
business practices; our ability to successfully restructure our
operations to comply with future changes in government regulation;
the loss of existing contracts and the accuracy of our assessment
of costs under new contracts; the high level of competition in our
industry; our ability to maintain or implement complex information
systems; our ability to implement our business strategy; our
ability to successfully integrate strategic acquisitions; and our
ability to comply with the terms of our settlement agreements with
the government.
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