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Onex Buys AMR


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Onex buying Laidlaw subsidiaries

Deal for U.S. health-care companies worth nearly $1 billion

American Medical Response, EmCare offer growth potential



Onex Corp. has signed a $980 million deal to buy two U.S. health service companies owned by former Canadian transportation giant Laidlaw International Inc.

Toronto-based Onex said late yesterday it had reached a deal with Laidlaw International to buy American Medical Response and EmCare Inc., companies acquired by Laidlaw several years ago.

"Both businesses in their own right have great growth potential from this point forward," Bobby Le Blanc, an Onex managing director, said in an interview from New York.

AMR, based in Denver, provides ambulance transport services, operating 4,400 vehicles at more than 260 locations in 34 states with about 18,200 employees.

Le Blanc said Onex will look to grow AMR through acquisitions and new contracts.

"More and more municipalities are realizing that outsourcing this service makes all the sense in the world," he said.

Dallas-based EmCare provides hospital emergency department physician staffing and management services, with over 300 contracts in 38 states and about 4,100 employees.

Onex said the investment will be made through Onex Partners and certain of its limited partners, which will invest $260 million in equity.

Senior management of the businesses will also be investors and owners along with Onex.

Once one of Canada's biggest transportation companies, Laidlaw International emerged from bankruptcy protection in 2003 after obtaining financing of about $1.2 billion (U.S.), most of which went to creditors.

Laidlaw, the former Hamilton school bus operator that went bankrupt and moved to the United States, said the company will use the money from the sale to pay off about $579 million (U.S.) of corporate debt.

Now a Delaware corporation based in suburban Chicago, Laidlaw is a holding company for North America's largest school and city bus operator, the Greyhound intercity bus line and U.S. providers of ambulance and hospital emergency department services.

"These companies have been excellent performers for the past few years, and I am delighted that they are being acquired by a company that appreciates both their potential and the quality of their current management team," said Kevin Benson, chief executive of Laidlaw.

Benson was CEO of Canadian Airlines before it was bought by Air Canada in 2000.

"The sale of AMR and EmCare demonstrates our commitment to maximize returns for our shareholders," Benson said in a release from the company's headquarters in Napervillle, Ill., outside Chicago. "The sale of the two companies will allow us to retire cumbersome and costly debt that originated from the reorganization, substantially de-lever our balance sheet and allow us to focus on improving the performance of our transportation businesses."

Shares in Onex, which announced the deal after markets closed, were up 23 cents at $20.01 on the Toronto Stock Exchange.

Onex said this fall that it was looking at two large potential equity investments worth $500 million to $1 billion. Speculation was prompted by its $1.7 billion in cash and short-term investments.

The company, controlled by financier Gerry Schwartz, operates in the services, manufacturing and technology sectors, with operating companies that include Celestica Inc., Magellan Health Services Inc., ClientLogic and the Cineplex Galaxy limited partnership.

New York-based Onex Partners is a $2.2 billion private equity fund set up by Onex Corp., with a $525 million financing commitment.

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Had ya goin'!

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