Eastern Paramedics' parent company keeps growing

CNY Business Journal (1994-95), May 29, 1995

SYRACUSE--The Rural/Metro Corporation, parent company of Eastern Paramedics here, has acquired American Ambulance, an emergency-service provider in Columbus, Ohio.

One in a series of acquisitions by the Scottsdale, Ariz. parent company, American Ambulance follows the acquisition of Eastern, National Ambulance in Rochester, and Physicians Ambulance in Cleveland, Ohio. In addition, a letter of intent to purchase has been signed with LaSalle Ambulance in Buffalo.

These acquisitions are part of an ongoing effort by Rural/Metro and other large ambulance-service providers to consolidate the ambulance industry. The larger companies provide more efficient operations with stronger financial resources. Rural/Metro operates in 11 states and provides fire, security, and emergency medical services.

Eastern Paramedics officials say the addition of LaSalle Ambulance to the Rural/Metro company will be another plus for New York operations as it opens more lines of communication and provides opportunities for joint training and sharing of resources.

"It gives us a larger resource base," says Philip Politano, public-information officer at Eastern Paramedics, "especially for additional personnel and equipment."

Politano points out that being part of a large corporation has provided his company with many advantages. "It allows us to invest in newer technology, which is becoming a requirement in the changing health-care industry. We've also been able to benefit from the expertise of the managers in he corporation." Politano says that they have been able to take advantage of Rural/Metro's management information system, which enables them to process their accounts more quickly and reliably. This is a crucial advantage in the ambulance business, where what a company bills is almost never what the company manages to collect. The more efficient you can get in that area the better it is," says Politano, "and for us the system has been tremendous."

LaSalle Ambulance would be one of Rural/Metro's larger acquisitions. Revenues in 1994 were approximately $15 million. The company provides "911" and general ambulance service for Buffalo and operates a paramedic training school for both American and international pre-hospital medical students. LaSalle Ambulance, like Eastern Paramedics and National Ambulance, is accredited by the Commission on Accreditation of Ambulance Services. There are only 39 accredited companies in the nation.

"This is a significant acquisition for us," says Robert Manschot, president and chief executive officer of Rural/Metro Corporation. "Following our acquisitions in Syracuse and Rochester, as well as the major cities in Ohio, this new operation provides us with a leading position in the Great Lakes region. As trends continue to move toward managed healthcare systems, this approach provides us with a competitive advantage, because we are able to provide large healthcare providers with greater accessibility and choices for their medical transportation needs throughout the entire region that they serve."

The purchase agreement is subjected to regulatory approval and due diligence. Terms of the agreement were not disclosed.

After a year as part of Rural/Metro Corp., Eastern Paramedics now enjoys a stronger financial base, new emergency medical equipment, better employee benefits, and more purchasing clout. For example, where Eastern might have purchased a couple of ambulances a year, Rural/Metro buys about five a month. Larger volumes can mean a significant price break, especially when Rural/Metro gets all its vehicles from one manufacturer.

In its first year as a Rural/Metro company, Eastern placed six ambulances in service, and expects delivery of three this year to handle an increased volume of emergency services and transports.

Eastern's general manager, Kurt Krumperman, welcomes the vehicle-replacement plan that has made his enlarged fleet a reality. "Also, our ambulances will soon carry new logos, displaying a uniformity among all Rural/Metro companies," he says.

In another improvement, national corporate training programs will upgrade and standardize rescue operations.

Last year, Eastern contributed nearly $34,000 worth of stand-by coverage, demonstrations, and health screenings to the Syracuse community. These free activities included presence and emergency readiness at such events as the Empire State Games, Police Olympics, Special Olympics, St. Patrick's Day Parade, Mountain-Goat Run, MS Society Bike Tour, Alzheimer's Memory Walk, and the Halloween Run.

Along with its fire-protection, 911-emergency, and safety-related subsidiaries, Rural/Metro already owns five ambulance services qualified by the Commission on Accreditation of Ambulance Services (CAAS), three of them in New York state. Eastern Paramedics was the first in the state, and one of the first in the nation, to receive this accreditation.

Rural/Metro (RURL), an active over-the-counter stock (NASDAQ), shows a current price-to-earnings ratio of 22, with average earnings-per-share estimates for fiscal 1995 (June) reaching 83.75 cents. The corporation serves 70 communities In Arizona, Florida, Oregon, Texas, Tennessee, and New York. Wall Street analysts recommend "Buy" or "Buy/Hold" for the stock. Brokers such as Paine Webber's Ron Rocco here feel that, despite the lack of dividends, the stable growth pattern makes RURL a promising stock for significant appreciation.