Consideration for the acquisition is approximately $155 million in cash, and ACP is debt free. Hanger plans to fund the transaction through cash on hand and a concurrent refinancing and expansion of its senior credit facilities. Senior management of ACP will buy approximately 500,000 shares of Hanger common stock immediately after consummation of the transaction.
A new but related growth platform for Hanger, ACP has current contracts to serve more than 4,000 out of a total market of approximately 15,000 skilled nursing facilities (SNF) nationwide, including 22 of the 25 largest national providers, says Hanger. ACP’s value proposition is to provide its customers with a full-service, total solutions approach encompassing proven medical technology, evidence-based clinical programs, and continuous onsite therapist education and training. Its services support increasingly advanced treatment options for a broader patient population and more medically complex conditions.
Hanger says it expects the transaction to be finalized before the end of the year, subject to customary closing conditions, including regulatory approvals, and the successful completion of Hanger’s planned financing. It has secured a financing commitment from a syndicate of financial institutions, including BofA Merrill Lynch, Jefferies & Company, Oppenheimer & Co, SunTrust Robinson Humphrey, and RBC Markets.
Thomas F. Kirk, president and chief executive officer of Hanger Orthopedic Group, said the transaction is consistent with Hanger’s strategy to achieve long-term growth through disciplined diversification of our revenue streams, whether through the introduction of additional third-party or Hanger-developed products, new distribution channels, geographic expansion or the broadening of itscontinuum of care.
ACP’s management team will remain entirely intact, with John Beach, its current CEO, reporting to Vinit Asar, Hanger’s executive vice president and chief growth officer.
For 2010, Hanger anticipates ACP will produce revenues of approximately $57 million and approximately $17 million of EBITDA. Hanger also expects that the transaction will be accretive to Hanger’s 2011 financial results and, depending on the timing of the transaction’s closing, to have a neutral to slightly accretive impact on its results for 2010.
Hanger, a provider of orthotic and prosthetic patient care services, owns and operates more than 675 patient care centers in 45 states and the District of Columbia.
Accelerated Care Plus is a developer of specialized rehabilitation technologies and a provider of evidence-based clinical programs for post-acute rehabilitation, serving more than 4,000 long-term care facilities and other subacute rehabilitation providers nationwide.
[Source: Hanger Orthopedic Group]