The New York equity fund seeking to buy the assets of MedCorp Inc. says it plans to keep the ambulance company's headquarters, administrative functions, and employees in Toledo if the proposed purchase goes through.
Christopher Garcia, managing partner with Enhanced Equity Fund LP of New York City, discussed details of the proposed acquisition in an interview with The Blade Wednesday, saying the fund wants "to keep the business intact."
The fund has offered $12.5 million for MedCorp's assets, and a court-appointed receiver has asked a judge to approve Enhanced Equity's bid.
"Our interest is in preserving jobs in Toledo and Ohio," said Mr. Garcia, whose investment fund has more than $600 million in assets under management. "Our interest is in creating a healthy company that can employ additional employees, as well as create additional opportunities for current employees."
A hearing regarding the proposed sale is scheduled for 10 a.m. April 29 before Lucas County Common Pleas Judge Gary Cook. The judge could decide that day whether to approve Enhanced Equity's acquisition bid.
Enhanced Equity acquired American Ambulette & Ambulance Service Inc., a Dayton emergency transport company, late last year. According to filings in Lucas County Common Pleas Court, the fund is working on a "consolidation strategy" with FirstMed Inc., an ambulance firm in Virginia and North Carolina.
If the MedCorp sale goes through, Mr. Garcia said, MedCorp and American would operate as subsidiaries of a holding company to be formed by Enhanced Equity. FirstMed also would be part of that holding company, he said.
MedCorp co-founder Richard Bage, who also submitted a bid to buy the firm, said he's concerned that Enhanced Equity will cut MedCorp jobs in northwest Ohio and move some of the firm's administrative functions. His attorney alleged in court this week that Enhanced Equity might move jobs to Columbus, and Mr. Bage suggested that some operations, such as billing, could be moved to Virginia.
He did not identify the source of those claims, which have been denied by Enhanced Equity.
"They're trying to get these companies cheap, roll them up, and try to make them profitable again," he said of Enhanced Equity. "And then, as most hedge funds, they'll sell them off."
MedCorp has 720 employees at 22 facilities in Ohio. More than 200 MedCorp employees work in Toledo, including at its headquarters at 745 MedCorp Drive. The company has regional command centers in Findlay, Euclid, and Cincinnati, according to MedCorp's Web site.
Enhanced Equity is interested in MedCorp because it has been "able to maintain its market position" in spite of financial instability and receivership, Mr. Garcia said.
Enhanced Equity was one of three entities that bid in January to buy MedCorp's assets. Community Emergency Medical Service of Southfield, Mich., submitted a bid worth $10.9 million to $12.6 million, while Mr. Bage submitted a bid worth $9.2 million, according to court testimony.
Mr. Bage lost his job with MedCorp after Mark Uhrich of Hillyer Group LLC was appointed in August as a receiver for MedCorp's assets and business affairs. He said the company had more than $100 million in sales for 2009, but did not know how the company performed last year.
Huntington National Bank requested Mr. Uhrich's appointment after it said MedCorp owed $10 million on two defaulted loans. The court issued a "cognovit" judgment in favor of Huntington in August, which was reduced to $9.6 million in February.
MedCorp was negatively affected, Mr. Bage said, by nonpaying or slow-paying customers, losses on Medicaid-funded transportation, and the city of Toledo's decision in 2007 to operate its own ambulance service. He declined to say what his next steps will be if Enhanced Equity's acquisition bid is approved, but said he's "trying to get my company back one way or another."
"I'm going to fight to the end, and I think that we will prevail," he said.
Enhanced Equity has 15 portfolio companies, including Correctional Healthcare Management, a Colorado firm that provides medical services for prison inmates; Guardian Healthcare, a Texas company that provides in-home medical care; and Regency Healthcare Group, an operator of three hospice center brands in several southern states.
The firm also owns Gem City Home Care in Dayton and Care Connection of Cincinnati, another home-based health-care business. The firms are subsidiaries of Guardian Healthcare.
Though Enhanced Equity focuses primarily on medical companies, its portfolio includes a few firms outside of the health-care industry, such as Integrated Mobile, an information technology company in Columbus
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