Mergermarket.pdf - Vinod Kumar

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ParaFlight EMS seeking acquisitions to expand nationally, CEO says 09 DEC 2020 ParaFlight EMS, a founder owned medical transport and logistics firm, is looking to acquire other similar businesses in a bid to expand services nationally, according to Sim Shain, founder and CEO. Lakewood, New Jersey-based ParaFlight would be open to tapping new capital sources including venture capital and private equity to finance acquisitions and fuel organic growth but is not currently actively seeking such funding, the CEO said. ParaFlight generates around 70% of its revenue in arranging private transportation of human organs to hospital transplant centers nationwide, including kidneys, livers, hearts, pancreas and others, the CEO said. It also arranges transportation of medical teams to conduct operations, as well as time-sensitive flights for other corporate customers, particularly in real estate, he added. The fast-growing company expects to generate revenue of over USD 10m this year, with around 700 flights, up from around 450 flights in 2019, he said. His goal, he said, is to arrange “well over 1,500 flights” next year. He said revenue has grown over 100% year-on- year for the past three years. Shain said the company is currently in the process of negotiating a merger with a similar business that has leases on eight aircraft which he expects to close early next year. “But we will still be looking to acquire or partner with other operators” he said. He said he is open to pitches from investment banks on potential acquisitions or partnerships. ParaFlight, which has no external investors, was founded by Shain in 2014. The company, which has over 30 fulltime employees and dozens of other per-diem employees, can arrange immediate air and ground transport to anywhere in the US at any time day or night as demand requires. The company operates a website called OrganFlights.com where hospitals and medical personnel can quickly arrange extremely time-sensitive flights for organs and medical workers. He said the company “plays well in the sandbox with our competitors,” and will refer business to competitors if necessary. “The common goal is to save lives” by getting organs to recipients as quickly as possible, he said. Shain, who calls ParaFlight “the Uber of medical flights,” does not own any aircraft but has a network of air and ground transport suppliers, along with leases on a few aircraft, which it taps to arrange flights. As a result, it keeps its expenses low, which was particularly beneficial during the COVID-19 crisis this year, which caused a downturn in hospital business, since some potential organ donors were COVID-infected. The CEO said he has received inbound inquiries to purchase the company, but said his intention is to grow the business organically and through acquisitions to expand its national footprint. “We have been approached, but what would I do afterwards?” he said. “We save lives and fly planes. I want to be in this forever.” The ultimate goal, he said, is to take the company public in coming years, though he did not cite any possible timeline for an IPO. “We want to have the ability to grow and have no limits,” Shain said, noting a public listing could help the company achieve this. The organ air transport business is “highly fragmented,” with many small 'mom-and-pop’ operators with leases on a few aircraft that focus on regional flights, Shain noted. He said the company would be interested in making acquisitions in any major population center in the US where it could bolster operations. It has closed no acquisitions to date, he added. Shain declined to disclose its hospital clients, citing confidentiality agreements, but said the company has arranged organ and medical personnel transport to major medical transplant centers including Baylor University Medical Center, Duke University Hospital, Yale New Haven Health Systems and many others. It can also arrange flights for international destinations, he added. There were nearly 40,000 organ transplants performed in the US in 2019, according to the company. ParaFlight does not currently work with an investment bank but is “receptive to looking at that,” the CEO said, particularly for growth opportunities. by Dane Hamilton