[Federal Register Volume 83, Number 51 (Thursday, March 15, 2018)]
[Notices]
[Pages 11527-11529]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-05251]


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FEDERAL TRADE COMMISSION

[File No. 171 0217]


Air Medical Group Holdings, Inc., KKR North America Fund XI (AMG) 
LLC, and AMR Holdco, Inc.; Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair methods of competition. 
The attached Analysis to Aid Public Comment describes both the 
allegations in the complaint and the terms of the consent orders--
embodied in the consent agreement--that would settle these allegations.

DATES: Comments must be received on or before April 6, 2018.

[[Page 11528]]


ADDRESSES: Interested parties may file a comment online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write: ``Air Medical Group 
Holdings, Inc., KKR North America Fund XI (AMG) LLC, and AMR Holdco, 
Inc.; File No. 1710217, Docket No. C-4642'' on your comment, and file 
your comment online at https://ftcpublic.commentworks.com/ftc/kkrenvisionamgconsent by following the instructions on the web-based 
form. If you prefer to file your comment on paper, write ``Air Medical 
Group Holdings, Inc., KKR North America Fund XI (AMG) LLC, and AMR 
Holdco, Inc.; File No. 1710217, Docket No. C-4642'' on your comment and 
on the envelope, and mail your comment to the following address: 
Federal Trade Commission, Office of the Secretary, 600 Pennsylvania 
Avenue NW, Suite CC-5610 (Annex D), Washington, DC 20580, or deliver 
your comment to the following address: Federal Trade Commission, Office 
of the Secretary, Constitution Center, 400 7th Street SW, 5th Floor, 
Suite 5610 (Annex D), Washington, DC 20024.

FOR FURTHER INFORMATION CONTACT: Sylvia Kundig (415-848-5188), Western 
Region-San Francisco, 901 Market Street, Suite 570, San Francisco, CA 
94103.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, 
notice is hereby given that the above-captioned consent agreement 
containing a consent order to cease and desist, having been filed with 
and accepted, subject to final approval, by the Commission, has been 
placed on the public record for a period of thirty (30) days. The 
following Analysis to Aid Public Comment describes the terms of the 
consent agreement, and the allegations in the complaint. An electronic 
copy of the full text of the consent agreement package can be obtained 
from the FTC Home Page (for March 7, 2018), on the World Wide Web, at 
https://www.ftc.gov/news-events/commission-actions.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before April 6, 2018. 
Write ``Air Medical Group Holdings, Inc., KKR North America Fund XI 
(AMG) LLC, and AMR Holdco, Inc.; File No. 1710217, Docket No. C-4642'' 
on your comment. Your comment--including your name and your state--will 
be placed on the public record of this proceeding, including, to the 
extent practicable, on the public Commission website, at https://www.ftc.gov/policy/public-comments.
    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online. To make sure that the Commission considers your 
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/kkrenvisionamgconsent by following the instructions on the web-
based form. If this Notice appears at http://www.regulations.gov/#!home, you also may file a comment through that website.
    If you prefer to file your comment on paper, write ``Air Medical 
Group Holdings, Inc., KKR North America Fund XI (AMG) LLC, and AMR 
Holdco, Inc.; File No. 1710217, Docket No. C-4642'' on your comment and 
on the envelope, and mail your comment to the following address: 
Federal Trade Commission, Office of the Secretary, 600 Pennsylvania 
Avenue NW, Suite CC-5610 (Annex D), Washington, DC 20580, or deliver 
your comment to the following address: Federal Trade Commission, Office 
of the Secretary, Constitution Center, 400 7th Street SW, 5th Floor, 
Suite 5610 (Annex D), Washington, DC 20024. If possible, submit your 
paper comment to the Commission by courier or overnight service.
    Because your comment will be placed on the publicly accessible FTC 
website at https://www.ftc.gov, you are solely responsible for making 
sure that your comment does not include any sensitive or confidential 
information. In particular, your comment should not include any 
sensitive personal information, such as your or anyone else's Social 
Security number; date of birth; driver's license number or other state 
identification number, or foreign country equivalent; passport number; 
financial account number; or credit or debit card number. You are also 
solely responsible for making sure that your comment does not include 
any sensitive health information, such as medical records or other 
individually identifiable health information. In addition, your comment 
should not include any ``trade secret or any commercial or financial 
information which . . . is privileged or confidential''--as provided by 
Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 
16 CFR 4.10(a)(2)--including in particular competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns, devices, manufacturing processes, or customer names.
    Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule 4.9(c). In particular, 
the written request for confidential treatment that accompanies the 
comment must include the factual and legal basis for the request, and 
must identify the specific portions of the comment to be withheld from 
the public record. See FTC Rule 4.9(c). Your comment will be kept 
confidential only if the General Counsel grants your request in 
accordance with the law and the public interest. Once your comment has 
been posted on the public FTC website--as legally required by FTC Rule 
4.9(b)--we cannot redact or remove your comment from the FTC website, 
unless you submit a confidentiality request that meets the requirements 
for such treatment under FTC Rule 4.9(c), and the General Counsel 
grants that request.
    Visit the FTC website at http://www.ftc.gov to read this Notice and 
the news release describing it. The FTC Act and other laws that the 
Commission administers permit the collection of public comments to 
consider and use in this proceeding, as appropriate. The Commission 
will consider all timely and responsive public comments that it 
receives on or before April 6, 2018. For information on the 
Commission's privacy policy, including routine uses permitted by the 
Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.

Analysis of Proposed Consent Orders To Aid Public Comment

I. Introduction

    The Federal Trade Commission (``Commission'') has accepted, subject 
to final approval, an Agreement Containing Consent Orders (``Consent 
Agreement'') with KKR North America Fund XI (AMG), LLC, Air Medical 
Group Holdings, Inc., (``AMGH''), and AMR Holdco, Inc. (``AMR''). The 
Consent Agreement is intended to remedy the anticompetitive effects 
that likely would result from AMGH's proposed acquisition of AMR (the 
``Acquisition''). Under the terms of the Consent Agreement, AMR must 
sell its inter-facility air medical transport services business in 
Hawaii. The Acquisition, if consummated, would result in the 
consolidation of the only two inter-facility air medical transport 
service providers in Hawaii.
    The Consent Agreement has been placed on the public record for 30 
days to solicit comments from interested persons. Comments received 
during this

[[Page 11529]]

period will become part of the public record. After 30 days, the 
Commission will again review the Consent Agreement and the comments 
received, and will decide whether it should withdraw from the Consent 
Agreement, modify it, or make final the Decision and Order (``Order'').

II. The Parties

A. AMGH

    AMGH is wholly owned by KKR North America Fund XI (AMG) LLC. It is 
likely the largest provider of air ambulance services in the United 
States with 270 operating locations in 38 states. AMGH operates as 
Hawaii Life Flight in Hawaii.

B. AMR

    AMR is a wholly-owned subsidiary of Envision Healthcare and is the 
largest national ground ambulance provider in the United States, but 
also provides air ambulance services in several locations. In Hawaii, 
it provides both ground ambulance services and inter-facility air 
ambulance transport services. To provide inter-facility air ambulance 
transport services, AMR partners with LifeTeam, an air ambulance 
provider located in the Midwest, which has the necessary FAA licenses 
and certifications, and provides the pilots and maintenance for the 
fixed-wing aircraft. AMR handles the marketing, medical personnel, and 
billing for the services provided.

III. The Proposed Acquisition

    Under an agreement executed on August 7, 2017, AMGH will acquire 
100 percent of the voting stock of AMR in a deal valued at 
approximately $2.4 billion.
    The Commission's Complaint alleges that the Acquisition, if 
consummated would violate Section 7 of the Clayton Act, as amended, 15 
U.S.C. 18, and Section 5 of the FTC Act, as amended, 15 U.S.C. 45, by 
substantially lessening competition for the provision of inter-facility 
air ambulance transport services in Hawaii.

IV. The Relevant Market and Structure of the Markets

    The Commission's Complaint alleges that the relevant product market 
in which to analyze the Acquisition is the provision of inter-facility 
air ambulance transport services. These services consist of air 
ambulance services that transfer patients between medical facilities on 
different islands, including from medical facilities with low acuity or 
limited patient treatment capabilities to those that can provide the 
appropriate medical and surgical care. The Commission's Complaint 
alleges that the relevant geographic market in which to analyze the 
effects of the Acquisition is the State of Hawaii.
    The Commission's Complaint alleges that the Acquisition will 
increase concentration in an already highly concentrated market. AMGH 
and AMR are the only two providers of inter-facility air ambulance 
transport services in Hawaii.

V. Effects of the Transaction

    According to the Commission, the effect of the Acquisition, if 
consummated, may be substantially to lessen competition and tend to 
create a monopoly in inter-facility air ambulance transport services, 
and increase the likelihood of the unilateral exercise of market power. 
The Acquisition would increase the likelihood that consumers, third-
party payers, or government health care providers would be forced to 
pay higher prices or experience degradation in service or quality.

VI. Entry Conditions

    The Commission's Complaint alleges that entry into the relevant 
market would not be timely, likely, or sufficient to deter or 
counteract the anticompetitive effects of the Acquisition. The primary 
barrier to entry is the lack of sufficient volume of referrals and 
payments from third party payers to justify the economic risk of new 
entry, even if the parties imposed a small but significant non-
transitory increase in price (SSNIP).

VII. The Proposed Consent Agreement

    The proposed Consent Agreement remedies the anticompetitive 
concerns raised by the Acquisition by requiring AMR to sell its inter-
facility air ambulance transport services business, including the 
assets that support that business, to AIRMD, LLC, dba LifeTeam. 
LifeTeam is a large, established company with experience in the 
industry. It is also the current operator of the FAA certified aircraft 
used by AMR for inter-facility air ambulance transport services in 
Hawaii, and thus very familiar with AMR's assets and operations in 
Hawaii. Under the proposed Consent Agreement, AMR will divest to 
LifeTeam the four-fixed wing aircraft it uses to fly patients inter-
island, support LifeTeam's application for a Certificate of Need with 
the State of Hawaii to operate ground ambulances, and offer LifeTeam 
the option to purchase up to four ground ambulances from AMR. LifeTeam 
would use the ground ambulances to support its air ambulance transport 
service to transfer patients to and from medical facilities and the 
aircraft it operates.
    The proposed Consent Agreement also contains an Order to Maintain 
Assets that will issue at the time the proposed Consent Agreement is 
accepted for public comment. The Order to Maintain Assets requires 
Respondents to operate and maintain the divestiture assets in the 
normal course of business through the date that the Respondents 
complete divestiture of the assets, thereby maintaining the economic 
viability, marketability, and competitiveness of the assets. The Order 
to Maintain Assets also authorizes the Commission to appoint an 
independent third party as a monitor to oversee the Respondents' 
compliance with the requirements of the proposed Consent Agreement.
    The purpose of this analysis is to facilitate public comment on the 
proposed Consent agreement, and the Commission does not intend this 
analysis to constitute an official interpretation of the proposed 
Consent Agreement or to modify its terms in any way.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2018-05251 Filed 3-14-18; 8:45 am]
 BILLING CODE 6750-01-P