Air Methods acquired by American Securities: fairness opinion by Centerview Partners
Deal terms
Implied value per share by method vs. $43.00 offer
Ranges as disclosed in the banker’s summary of analyses; the red line marks the per-share consideration.
Opinion of Centerview Partners to the target board
Discounted cash flow assumptions
Discounted to present value as of December 31, 2016; fully-taxed unlevered free cash flows for January 1, 2017 through December 31, 2021; book value of net debt as of December 31, 2016 subtracted; divided by fully diluted shares based on Internal Data.
Selected precedent transactions (6)
| Date | Target | Acquirer | Multiple |
|---|---|---|---|
| 2015-07 | Rural/Metro Corporation | Envision Healthcare Corporation | — |
| 2015-03 | Air Medical Group Holdings, Inc. | KKR & Co. L.P. | — |
| 2011-06 | OF Air Holdings Corporation (parent corporation of Omniflight Helicopters, Inc.) | Air Methods Corporation | — |
| 2011-03 | Rural/Metro Corporation | Warburg Pincus LLC | — |
| 2011-02 | Emergency Medical Services Corporation | Clayton, Dubilier & Rice, LLC | — |
| 2010-08 | Air Medical Group Holdings, Inc. | Bain Capital, LP | — |
| Multiple | Low | Median | High | Range applied | Implied per share |
|---|---|---|---|---|---|
| EV / LTM Adjusted EBITDA (applied to FY2016 EBITDA) | 8.0x | — | 10.7x | 8.0x–10.5x | $38.50–$57.50 |
Other analyses
| Analysis | Summary | Implied per share |
|---|---|---|
| Historical trading prices (52-week period ended March 13, 2017) | Low and high closing prices for the Shares of approximately $24.75 and $43.10; 52-week high closing price during the period ended March 1, 2017 (day prior to media speculation about a potential sale) of $40.49. Noted for informational purposes only. | $24.75–$43.10 |
| Wall Street research analyst price targets | Latest available low and high stock price targets for Company Common Stock as of March 13, 2017 ranged from $39.00 to $50.00 per Share. Noted for informational purposes only. | $39.00–$50.00 |
Aggregate fee of approximately $17.4 million, all payable contingent upon consummation of the Transactions; plus expense reimbursement and indemnification. Centerview had not been engaged by the Company, Parent, Purchaser or Sponsor in the prior two years and received no compensation from them during that period.
Management projections
| Projection year | Year 1 | Year 2 | Year 3 | Year 4 | CAGR |
|---|---|---|---|---|---|
| Revenue | $1.3B | $1.4B | $1.5B | $1.5B | 5.1% |
| Revenue growth | 5.2% | 5.1% | 5.1% | 5.0% | |
| EBITDA | $349M | $375M | $401M | $428M | 7.0% |
| EBITDA growth | 7.7% | 7.4% | 6.9% | 6.7% | |
| EBITDA margin | 27% | 27% | 28% | 28% | |
| Implied EV / EBITDA | 7.0x | 6.5x | 6.1x | 5.7x |
Year-1 growth is against LTM at announcement ($1.3B revenue, $324M EBITDA); later years are year over year.
Centerview relied on the "Forecasts" - internal financial forecasts, analyses and projections prepared by Air Methods management and furnished to Centerview, covering January 1, 2017 through December 31, 2021, including projected revenue, EBITDA, EBIT and unlevered cash flow. The DCF used fully-taxed unlevered free cash flows over 2017E-2021E plus a perpetuity-growth terminal value. Specific annual revenue/EBITDA figures were not included in the sections provided.
Process notes
Other Medical Transportation fairness opinions
- Rural/Metro / Warburg Pincus 2011 · 8.6x EV/EBITDA
All Medical Transportation opinions → · Centerview Partners opinions