After the announcement of a proposed buyout of Emergency Medical Services Corp an investigation on behalf of investors in Emergency Medical Services Corporation (Public, NYSE:EMS) shares questioning a potential unfairness of the takeover and possible breaches of fiduciary duties by certain Emergency Medical Services officers and directors was announced.

The investigation by a law firm concerns possible breaches of fiduciary duties by certain officers and directors at Emergency Medical Services Corp. arising out of their attempt to sell Emergency Medical Services to Clayton, Dubilier & Rice, LLC.

EMS shares rose from under $54 to $63 on Dec 14, 2010,after Emergency Medical Services Corporation confirmed that it is reviewing various strategic alternatives to enhance stockholder value.

Since then NYSE: EMS shares rose to $70.66 on Friday Feb 11. Then on Monday, Feb 14, 2011, Emergency Medical Services Corporation (NYSE:EMS) and Clayton, Dubilier & Rice, LLC announced a definitive merger agreement under which an affiliate of Clayton, Dubilier & Rice, LLC formed to complete the merger will acquire Emergency Medical Services Corp.
Under the terms of the agreement EMS stockholders would receive, at the closing of the transaction, $64.00 in cash for each share of Emergency Medical Services Corp Class A common stock and Class B common stock and each LP Exchangeable Unit.
Following the takeover announcement shares of Emergency Medical Services Corporation dropped on Monday to under $63 per share.
Emergency Medical Services Corporation said Onex Corporation and its affiliates, the holders of Emergency Medical Services LP Exchangeable Units, have sufficient voting power to approve the merger, and have agreed to vote in favor of adoption of the merger agreement.
Under the proposed transaction, Onex, Onex Partners I and certain co-investors will sell their remaining 13.7 million EMSC shares, or 31% equity interest, for net proceeds of US$878 million. Onex Corp. itself will get $339 million, approximately 10 times the per-share cash cost it spent in 2005. Onex Corp. bought the EMS shares for $6.67 each in 2005
Onex Corporation said Onex Corp., Onex Partners I and certain co-investors invested initially $214 million in Emergency Medical Services Corporation and will receive total net proceeds of $1.65 billion, including the secondary offerings completed in 2009. This would result in a multiple of invested capital of approximately 8 times

But the investigation concerns whether Emergency Medical Services Board of Directors undertook an adequate and fair sales process to obtain fair consideration for all shareholders of Emergency Medical Services Corporation (NYSE:EMS) and specifically whether the EMS board of directors breached their fiduciary duties to Emergency Medical Services Corp.(EMS) shareholder by failing to adequately shop the Company before entering into this transaction. The investigation concerns also whether Clayton, Dubilier & Rice is underpaying for EMS shares, thus unlawfully harming EMS stockholders since EMS stock traded as high as $70.94 as recently as February 10, 2011 and at least one analyst set a price target of $76 per share of EMS stock. In addition Emergency Medical Services Corporation performed exceptionally well for its shareholders. Emergency Medical Services 12 months Total Revenue increased from $1.934billion in 2006 to $2.569billion in 2009. Its Net Income almost tripled from $39.07million in 2006 to $115.24million in 2009. For the first three quarters in 2010 Emergency Medical Services reported a combined nine months Total Revenue of $2.125billion with a combined nine months Net Income of $91.75million. A potential class action lawsuit would seek to maximize the amount of money and information EMS shareholders would receive in a buyout, so the law firm.