Jan 7, 2022 - Economy

Scoop: General Atlantic snaps up PT Solutions at $1.2 billion valuation

Illustration of a hundred dollar bill with Franklin sweating in wearing a sweatband

Illustration: Sarah Grillo/Axios

General Atlantic acquired PT Solutions from Lindsay Goldberg in an approximately $1.2 billion transaction, marking the latest physical therapy investment in recent weeks, Axios has learned.

Why it matters: After the physical therapy sector got its teeth kicked in with COVID, recent dealmaking suggests the industry is back in action and buyer interest remains strong.

  • All this is happening while tech-focused investors inject big dollars into digital musculoskeletal therapy startups like Hinge or Sword that don’t rely on traditional clinics.

By the numbers: ​​General Atlantic made a majority investment in PT Solutions, while TowerBrook Capital Partners, in partnership with health system Ascension snagged a minority stake through a preferred equity investment, sources say.

  • The deal concludes a Triple Tree sale process, and the valuation implies around 15x the company’s approximately $80 million of EBITDA, sources say.
  • During Lindsay Goldberg’s ownership, PT Solutions executed 17 acquisitions, increased adjusted EBITDA by 250 percent-plus, and its network of clinics more than doubled to over 300, says one of the people.
  • PT Solutions has a unique model, built around tailored hospital partnerships.

Separately, PennantPark Investment Advisers looks poised to score a big return on its pending sale of Pivot Health Solutions to Athletico, a BDT Capital Partners portfolio company. Jefferies advised Pivot on the deal.

  • Sources tell Axios the Towson, Maryland-based physical therapy company is expected to command an enterprise value of approximately $550 million.
  • PennantPark took the keys of the business from its previous PE owners less than three years ago, injecting $25 million in the Pivot as part of its recapitalization.
  • As of September 2021, the total value of all the different securities that PennantPark has in Pivot is $134 million, according to the lender's Q3 report.

The big picture: Despite some noise around new regulation, investors still see a big opportunity for consolidation and innovation amid the reopening of clinics. An aging population and plentiful musculoskeletal issues will continue to fuel demand for both traditional assets and those looking to reinvent the sector.

  • General Atlantic, Lindsay Goldberg, TowerBrook, PennantPark and Athletico declined to comment.
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