Laidlaw, CareLine Announce Merger Plans
Laidlaw Inc., a Toronto-based transportation and waste-management company, announced Tuesday that it will merge with CareLine Inc. of Santa Ana, which would make Laidlaw the largest provider of ambulance service in the United States.
The Canadian company will pay $180 million in common stock for CareLine, which ranks third in the United States behind Laidlaw’s Medtrans Healthcare Transportation. Laidlaw will also assume $175 million in debt from CareLine, making the acquisition worth $355 million.
“Laidlaw and CareLine share a common culture and industry vision,” said Keith Huzyak, CareLine chairman and chief executive. “We expect this transaction will [add] to our earnings from Day One.”
The combined company will produce more than $500 million in revenue with the operation of about 2,000 ambulances in 20 states by next year, a CareLine spokesman said.
“In general, it will make CareLine a much stronger company in the long run, with much stronger backing,” said Sheryl R. Skolnick, an analyst with Robertson Stephens, an investment bank in New York. She said the merger will be a complementary fit because CareLine is stronger in Orange and Los Angeles counties, whereas Laidlaw has a bigger presence in the San Diego area.
CareLine’s 3,600 employees should not be affected by the acquisition, according to John Grainger, chief executive of Laidlaw’s passenger services division. The company expects the deal to be completed within three months.
Analysts say Laidlaw should be better able to absorb CareLine’s debts because of its greater size and diversification. CareLine expects to report a loss of $2.2 million for the second quarter, contrasted with a profit of $962,000 for the same quarter last year.
Medtrans provides service in Southern California, Washington and the Northeastern states. CareLine operates in 11 states, including Florida, Georgia, Alabama, Massachusetts and Pennsylvania.
CareLine’s stock closed up $1.625 in Nasdaq trading Tuesday, at $9.875. Laidlaw stock fell 12.5 cents to close at $9.75 on the New York Stock Exchange.
