Leading provider of air medical emergency transport services, Air Methods Corporation AIRM announced that it is set to be acquired by New York-based private equity firm American Securities LLC for $2.5 billion.

Stock Performance

Over the last one year, the price performance of Air Methods has been encouraging. The stock added 17.94%, higher than the Zacks classified Medical Services sub-industry’s gain of 4.98%. Also, the current level compares favorably with the S&P 500’s return of 15.00% over the same time frame.

On the flipside, the estimate revision trend for the stock lacks luster. The current quarter has seen one estimate moving south over the last month, with no movement in the opposite direction. As a result, the Zacks Consensus Estimate for the current quarter dropped to 38 cents per share from 41 cents over the same time period.

American Securities has offered $43 per share for the company, slightly above Air Methods' closing price of $41.40 on Monday. The deal also includes acquiring Air Methods' net debt. Upon closure of the deal, the company would be privately owned. The transaction is expected to close in the second quarter of 2017 upon receiving shareholder approval.

Over the long run, we are bullish on the company owing to its focus on improving the bottom line by consolidating bases, shifting to more efficient helicopters and taking over the reins from its hospital-based model clients.

Air Methods is a leading player in air medical transportation. Its fleet of owned, leased or maintained aircraft features approximately 500 helicopters and fixed wing aircraft. The company operates through three divisions. Of these, the Air Medical Services Division is the largest provider of air medical transport services in the U.S.

The United Rotorcraft Division specializes in the design and manufacture of aeromedical and aerospace technology. The Tourism Division comprises Sundance Helicopters, Inc. and Blue Hawaiian Helicopters, which provide helicopter tours and charter flights in the Las Vegas/Grand Canyon region and Hawaii, respectively.

Key Picks

Currently, Air Methods has a Zacks Rank #4 (Sell).

Better-ranked stocks in the broader medical sector include Inogen Inc. INGN, Avinger, Inc. AVGR and Fluidigm Corporation FLDM. Notably, Inogen sports a Zacks Rank #1 (Strong Buy) while Fluidigm and Avinger carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Inogen has a long-term expected earnings growth rate of 17.05%. Notably, the stock has an impressive one-year return of 77.4%.

Avinger projects sales growth of 30.6% for the current year. Additionally, the company posted a positive earnings surprise of 27% last quarter.

Fluidigm Corporation has a long-term expected earnings growth rate of 25%. The stock has added 6.08% over the last one year.

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