US Physical Therapy (USPH), an outpatient physical therapy and industrial injury prevention services provider, has agreed to acquire a 50% equity interest in MSO Metro for $76.5m.
MSO Metro is a management services organisation with 50 outpatient clinics, primarily in New York, with plans for further expansion in the region.
These clinics provide physical, occupational, and speech therapy, along with in-home physical therapy services.
Currently, the firm generates approximately $64m in annual revenue and around $12m in annual EBITDA.
Under the agreement, the industrial injury prevention services provider will become the managing member of MSO Metro.
The purchase agreement includes standard representations, warranties, covenants, and indemnification.
MSO Metro’s current owners will retain a 50% ownership interest.
US Physical Therapy will pay $75m by cash on hand and the remaining $1.5m by shares of the company’s common stock, based on a trailing five-day average at closing.
Additionally, the agreement features an earnout provision, allowing sellers to earn up to $20m more if specific performance criteria are met.
USPH CEO Chris Reading said: “We have been working on this for some time and look forward to completing this transaction by month’s end. I am especially impressed by the leadership of what will soon be our newest and largest PT partnership.
“The CEO has assembled a dedicated and capable executive team who have demonstrated their collective ability to oversee and deliver exceptional care to their patients while growing their company at an extraordinary rate.
“Our entire team looks forward to completing this opportunity while assisting our newest partners on their outsized growth vision for the region.”
Founded in 1990, US Physical Therapy operates around 687 outpatient clinics across 42 states. Its clinics offer preventive and post-operative care for orthopaedic disorders, sports injuries, neurological injuries, and worker rehabilitation.
Additionally, the organisation manages 40 therapy facilities for unaffiliated third parties, including hospitals and physician groups.
The transaction is expected to close on 31 October 2024, pending customary closing conditions.
Last month, the industrial injury prevention services provider acquired a Pennsylvania-based physical therapy and hand therapy practice operator with eight clinic locations.
