McClellan-based Calstar to merge with rival air medical services firm

Calstar, the regional air ambulance service based at McClellan, and Santa Rosa’s Reach Air Medical Services announced Thursday that they are entering into a merger agreement that will create the largest network of air ambulance bases in California.

Officials said the agreement will position Calstar within the same holding company as Reach.

In a joint announcement, Sean Russell, Reach president, and Calstar CEO Lynn Malmstrom, said Calstar will become a limited liability company and operate under the current Calstar brand as Calstar Air Medical Services LLC.

The new company will be one of the three firms under Reach Medical Holdings LLC, a holding corporation, which is part of Missouri-based Air Medical Group Holdings Inc., one of the largest air medical firms in the United States. Cal-Ore Life Flight, which merged with Reach in 2011, also is a part of the holding company. Cal-Ore is based in Brookings, Ore.

“Our companies have been competitors for 30 years, built upon similar foundations of high-quality services, patient care and loyalty to our communities, to our patients and to our members who rely upon us for safe, reliable air medical transport,” Russell said in a statement.

Officials said Calstar Air Medical Services LLC will continue to operate with its own flight nurse staffing model.

Both parties said they do not anticipate any base closures as a result of the merger. They also said “no other decisions have been made related to services.” No announcements were made on staffing levels.

Financial terms of the deal were not disclosed, but officials said proceeds from the transaction will fund a new not-for-profit foundation to benefit the public. More details on the foundation will be released at a later date, officials said.

Calstar’s Malmstrom said in a statement that a team comprised of staff from each company will be appointed to oversee the merger: “We want to ensure that the resources of both programs are reviewed and utilized in a manner that is reflective of the best practices from our 30-year commitments to community and patient care, to industry-leading employee training and to the safe operations of one of the most modern rotor and fixed-wing fleets in air medical care.”

Officials said Malmstrom and two others on his senior executive team – Chief Operating Officer Tad Henderson and Chief Financial Officer Mark Vincenzini – will assist with the integration, but their respective roles will cease within the next 12 months as part of the agreement.

Reach, founded in 1987, oversees more than 40 rotor and fixed-wing aircraft at more than 30 bases in California, Oregon, Nevada, Wyoming, Montana and Colorado. It also has affiliations with hospitals in Texas. Combined with Cal-Ore, it has approximately 600 employees.

Calstar was founded in 1984 in Hayward but subsequently moved its headquarters to McClellan. Calstar employs about 225 and oversees 14 rotor and fixed-wing aircraft at nine bases. Besides McClellan, Calstar’s service areas include Auburn, South Lake Tahoe, Oakland, Concord, Gilroy, Ukiah, Salinas and Santa Maria.

This story was originally published June 16, 2016 at 3:17 PM with the headline "McClellan-based Calstar to merge with rival air medical services firm."