U.S. Physical Therapy Announces Acquisition of a Nine-Clinic Physical Therapy And Hand Therapy Practice

Rhea-AI Summary

U.S. Physical Therapy, Inc. (USPH) acquires a physical therapy and hand therapy practice with nine clinic locations, investing $16.4 million for a 50% equity interest. The practice generates $11.4 million in annual revenues and 65,000 annual visits. CEO Chris Reading highlights the strategic partnership.

Insights

Financial Analyst

The acquisition of a physical therapy and hand therapy practice by U.S. Physical Therapy, Inc. represents a strategic move in the healthcare services market. The financial outlay of $16.4 million for a 50% stake in a practice generating $11.4 million in annual revenues indicates a valuation that is roughly 1.44 times the revenue. This multiple should be compared with the industry average to assess the deal's attractiveness. The retention of a 50% interest by the current practice owners suggests a partnership model, which could be beneficial as it maintains the entrepreneurial drive of the original owners while providing them access to USPH's resources for expansion.

Furthermore, the mention of a 'workers comp centric mix of business' indicates a focus on occupational health, a sector that is generally stable and could provide recurring revenue due to the essential nature of physical therapy in worker rehabilitation. However, investors should monitor the integration of this acquisition and the actual synergy realization, as the success of such deals hinges on seamless operational and cultural integration.

Healthcare Industry Analyst

The acquisition of nine clinic locations specializing in physical therapy and hand therapy expands USPH's footprint and diversifies its service offerings. The emphasis on workers' compensation cases could be a response to a growing demand for specialized rehabilitation services. This sector of healthcare is highly regulated and successful navigation of billing and reimbursement processes is essential for profitability.

Investors should consider the potential for growth in this niche, particularly given the CEO's statement on an 'appetite to grow in this and surrounding markets.' Expansion into new markets can be capital intensive and the effectiveness of the growth strategy will be a key factor to watch. The performance of this acquisition will also provide insights into USPH's capability to leverage new partnerships and expand its market share in a competitive healthcare landscape.

Market Research Analyst

The outpatient physical therapy market is becoming increasingly competitive and scale can be a significant factor in negotiating with payers and driving down costs. USPH's acquisition could be seen as a move to increase its bargaining power and efficiency. By analyzing the current market trends, one can infer that USPH may be looking to capitalize on the growing demand for outpatient services, which has been driven by an aging population and a shift towards cost-effective post-acute care.

It's important to note that the annual visits figure of approximately 65,000 provides an indication of the practice's capacity and patient turnover. This metric, combined with the revenue figure, can give investors insight into the practice's average revenue per visit and efficiency. As the healthcare industry shifts towards value-based care, these metrics will become increasingly important in evaluating a practice's financial health and long-term viability.

HOUSTON--(BUSINESS WIRE)-- U.S. Physical Therapy, Inc. ("USPH" or the “Company”) (NYSE: USPH), a national operator of outpatient physical therapy clinics and provider of industrial injury prevention services, announced the acquisition of a physical therapy and hand therapy practice with nine clinic locations.

USPH acquired a 50% equity interest in the practice for a purchase price of $16.4 million, with the current practice owners retaining a 50% interest. The business currently generates approximately $11.4 million in annual revenues and approximately 65,000 annual visits.

Chris Reading, Chief Executive Officer, said, “This will be a great partnership addition to an already strong market for us. Our newest partners have done an exceptional job with a nicely developed workers comp centric mix of business and an appetite to grow in this and surrounding markets.”

About U.S. Physical Therapy, Inc.

Founded in 1990, U.S. Physical Therapy, Inc. operates 678 outpatient physical therapy clinics in 42 states. The Company's clinics provide preventative and post-operative care for a variety of orthopedic-related disorders and sports-related injuries, treatment for neurologically-related injuries and rehabilitation of injured workers. In addition to owning and operating clinics, the Company manages 41 physical therapy facilities for unaffiliated third parties, including hospitals and physician groups. The Company also has an industrial injury prevention business which provides onsite services for clients’ employees including injury prevention and rehabilitation, performance optimization, post-offer employment testing, functional capacity evaluations, and ergonomic assessments.

More information about U.S. Physical Therapy, Inc. is available at www.usph.com. The information included on that website is not incorporated into this press release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240401692812/en/

U.S. Physical Therapy, Inc.

Carey Hendrickson, Chief Financial Officer

email: chendrickson@usph.com

Chris Reading, Chief Executive Officer

(713) 297-7000

Three Part Advisors

Joe Noyons

(817) 778-8424

Source: U.S. Physical Therapy, Inc.

FAQ

What did U.S. Physical Therapy, Inc. (USPH) acquire?

USPH acquired a physical therapy and hand therapy practice with nine clinic locations.

How much did USPH invest in the acquisition?

USPH invested $16.4 million for a 50% equity interest in the practice.

How much revenue does the acquired practice generate annually?

The acquired practice generates approximately $11.4 million in annual revenues.

How many annual visits does the acquired practice have?

The acquired practice receives approximately 65,000 annual visits.

Who retains a 50% interest in the practice after the acquisition?

The current practice owners retain a 50% interest in the practice after USPH's acquisition.