Scottsdale-based Rural/Metro Corp., a national provider of private fire protection and ambulance services, has agreed to be acquired by Warburg Pincus, a private equity firm, in an all-cash transaction estimated at $438 million.
The Rural/Metro board of directors, acting on the recommendation of a special committee consisting of independent directors, unanimously approved the terms of the agreement with Warburg Pincus, which calls for Rural/Metro shareholders to receive $17.25 per share of common stock in cash.
A Rural/Metro media statement called that a 37-percent premium over the stock’s closing price on March 25 and a 28-percent premium over the volume weighted average share price over the previous month.
Rory Mackin, a Warburg Pincus spokesperson in New York, said no major changes in the Rural/Metro operations or management team were expected, adding that Warburg Pincus was pleased with the existing administration.
In the Tucson metropolitan area, several fire districts contract with Rural/Metro for fire protection services, the largest being Mountain Vista Fire District in Northwest Tucson. Scott Butler, Mountain Vista’s administrative chief, said he doesn’t expect any changes in the district’s contract with Rural/Metro because of the purchase by Warburg Pincus.
“It appears they are an investor group and not an operating group, so I assume the same administration and management at Rural/Metro will continue to be in place,” Butler said. “They are saying not to expect any changes at our level.”
Mountain Vista is in the process of building a second fire station, and purchasing its own apparatus and equipment, Butler said. With the completion of Mountain Vista’s Magee Road station in November of this year, Butler said the district would then only contract with Rural/Metro for personnel.
The district’s first station, on North Shannon Road, opened in January of this year. Mountain Vista’s contract with Rural/Metro expires on July 1, 2014, Butler added.