Rural/Metro Corporation, a national provider of ambulance and private fire protection services in 20 states, has entered into a definitive agreement to be acquired by the global private equity firm Warburg Pincus in an all-cash transaction.
Under terms of the agreement, Rural/Metro shareholders will receive $17.25 per share of common stock in cash, representing a 37 percent premium over the closing price on March 25 and a 28 percent premium over the volume weighted average share price over the previous month.
Rural/Metro provides medical transportation services to approximately 400 communities throughout the United States. Customers include municipal, county and state governments, large hospital networks, community healthcare providers, commercial and industrial sites, and airports.
Rural/Metro's board of directors, acting on the recommendation of a Special Committee consisting of independent directors, unanimously approved the terms of the agreement and recommended that Rural/Metro shareholders approve the transaction. In addition to shareholder approval, the transaction is subject to the satisfaction of customary closing conditions and regulatory approvals. It is currently anticipated the transaction will be completed by the end of June 2011.
"The Board believes that this transaction is an exceptional opportunity for Rural/Metro's shareholders,” said Christopher Shackelton, Rural/Metro’s chairperson of the board. “We have worked diligently to maximize the long-term value in the business, and are pleased that our shareholders are being rewarded for their trust in the Company's vision, business plan and management."
Shackelton emphasized that, "Following careful consideration and the examination of various methods to enhance shareholder value, the Board of Directors believes that now is an advantageous time for the Company to move to the next stage of its development as a private company under the stewardship of Warburg Pincus."
"We believe an investment in Rural/Metro and this industry is a tremendous opportunity for Warburg Pincus,” said Sean Carney, a Warburg Pincus managing director. “Rural/Metro is an expert provider of ambulance and private fire protection services with an experienced management team that has delivered excellent results and increased shareholder value."
RBC Capital Markets and Moelis & Company are acting as financial advisors, and the law firm of Paul, Hastings, Janofsky & Walker is acting as legal advisor to Rural/Metro.
Citigroup Global Markets, Inc., Credit Suisse and Jefferies & Company, Inc. acted as financial advisors, and Cleary Gottlieb Steen & Hamilton is acting as legal advisor to Warburg Pincus.