Advent International has agreed to acquire a majority ownership interest in ATI Physical Therapy, a provider of outpatient physical therapy, from KRG Capital Partners.
ATI Physical Therapy is a nationally-recognized rehabilitation provider specializing in physical therapy, work conditioning, aquatic therapy, hand therapy, sports medicine, women’s health, complimentary injury screenings, and other specialty services. ATI operates more than 500 clinics in 19 US states and is a market share leader in each of its top nine markets with a first or second market share position based on store count. In 2015, ATI’s facilities served nearly 300,000 patients. The company was founded in 1996 and is headquartered in the Chicago suburb of Bolingbrook (www.atipt.com).
“ATI has become a leader in its chosen markets and we see a number of avenues for continued growth and expansion,” said John Maldonado, a Managing Director at Advent. “ATI is a high-quality operator with best-in-class clinics, a strong leadership team and active de novo and acquisition strategies that we believe will enable it to grow by opening new ATI clinics and by being a primary consolidator in a fragmented industry.”
The $15 billion outpatient physical therapy market is large and growing, with more than18,000 freestanding clinics in the US. Advent expects the market will continue to grow based on the aging population’s need for physical therapy and the increased utilization of physical therapy by a wide range of age groups resulting from the growing awareness of physical therapy’s clinical value and cost effectiveness.
ATI’s current management team, led by CEO Dylan Bates, will retain a significant minority stake in the company and continue to lead the company under Advent ownership. “The outpatient physical therapy market in the US is large, growing and highly fragmented, and we believe that Advent’s resources and expertise with healthcare services companies will help us to execute and accelerate our expansion strategy,” said Mr. Bates.
As part of the transaction, Advent Operating Partner Dr. Chris Krubert will join ATI’s Board of Directors. Dr. Krubert previously was the Chief Executive Officer of ApolloMD, a healthcare professional services firm.
Advent International is owned and operated by 45 partners and governed by a group of 14 managing partners. The firm has offices in 16 countries and employs 170 investment professionals across Western and Central Europe, North America, Latin America and Asia. Founded in 1984 and headquartered in Boston, Advent has $42 billion in assets under management and has completed more than 300 buyout and private equity transactions (www.adventinternational.com).
Jefferies (www.jefferies.com) and UBS (www.ubs.com) are serving as financial advisors to ATI on the transaction. Hogan Lovells (www.hoganlovells.com) is serving as ATI’s legal counsel.
Advent’s financial advisor is Barclays (www.barclays.co.uk), and Weil, Gotshal & Manges (www.weil.com) and McDermott Will & Emery (www.mwe.com) are serving as the firm’s legal advisors.
© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 3-30-16
