Private Equity Health Care Acquisitions – July 2022

In light of the growing investor interest in healthcare and the risks associated with private equity ownership of healthcare companies, the Private Equity Stakeholder Project will be tracking private equity-backed healthcare acquisitions. Below is a list of private equity healthcare buyouts and add-on acquisitions completed or announced during July 2022. We will continue to track acquisitions on a monthly basis.

See June 2022 acquisitions here. 

Physical Therapy

July saw multiple private equity acquisitions of physical therapy practices, reflecting continued PE interest in the sector. In early 2022, analysts noted that PE firms remain bullish on physical therapy, “driven by the strong demographic trends and outstanding consolidation opportunity.” [1] In 2018, there were estimated to be at least 16,000 outpatient physical therapy clinics in the U.S., with no provider accounting for more than 5% of total industry revenue or 10% of market share by number of clinics. [2] Now in 2022, the estimated number of outpatient physical therapy clinics has more than doubled to 38,000, with still no providers exceeding 10% market share. [3]

BDT Capital Partners-owned Athletico Physical Therapy has acquired two more physical therapy practices, expanding its presence in Mississippi and Oklahoma. Athletico currently has approximately 8,000 employees at more than 900 locations across 25 states [4], acquiring at least 12 practices since its PE-backing in 2014 [5]. The company has more than doubled in size since that year, when it had approximately 300 locations in eight states [6]. According to a recent report, Athletico Physical Therapy has the fourth largest market share (2.4%) of the outpatient physical therapy market [7].

Athletico acquired two other physical therapy firms at the beginning of 2022, expanding by 18 and 259 locations. The more recent July acquisitions include Crossroads Rehabilitation Physical and Occupational Therapy, which adds nine locations to Athletico; and Action Physical Therapy and Rehabilitation, adding five locations. 

Other PE acquisitions of physical therapy providers in July: 

• Upstream Rehabilitation, which is owned by PE firms Athyrium Capital Management, Stags Participations, Shumway Capital, has bought Louisiana-based Acadian Comprehensive Therapy Services (ACTS). The acquisition makes Upstream the largest dedicated physical therapy company in the US, with more than 1,200 owned or managed clinics in 28 states [8].
• Beecken Petty O’Keefe & Company’s (BPOC) Alliance Physical Therapy Partners acquired Excel Rehab & Sports, expanding into Tennessee and South Carolina [9].
• Thomas H. Lee Partners’s Professional Physical Therapy acquired NY-based hand therapy clinic Complete OT and OTA Services. Professional operates over 190 facilities in the Northeast [10]. 

Occupational Healthcare

Also notable are investments in workplace health services. In July, Kain Capital-owned Akeso Occupational Health acquired WorkPartners Occupational Health Specialists [11]. Additionally, HealthCues received an undisclosed amount of development capital from its PE-sponsor, Innova Capital Partners [12].  Akeso, WorkPartners, and HealthCues are occupational health providers, which focus on “the interrelationship between the health of workers and their workplaces [13].” 

The most common occupational health services used by employees are treatment of work-related injury or illness, physical exams, injury management, and drug testing. Occupational health providers may also perform workplace health and safety functions, such as analyses of job requirements, industrial surroundings, and on-the-job risk factors [14].

Among employers with 5,000 or more employees, prevalence of occupational health services declined from 35% to 25% between 2010 and 2020. The most common industries to provide occupational health services are healthcare (54% of employers with 5,000 or more employees), manufacturing (28%), and financial services (27%) [15].

Recent PE deals involving occupational health providers have primarily been add-on acquisitions. Since 2020, approximately 20 occupational health providers have been added onto existing PE portfolio companies [16].

July 2022 Buyouts

July 2022 Add-On Acquisitions

July 2022 Growth/Expansion Investments

[1] https://www.providenthp.com/wp-content/uploads/2021/10/Q3-2021-Rehabilitation-Newsletter.pdf

[2] https://www.providenthp.com/wp-content/uploads/2018/07/Physical-Therapy-Whitepaper_FINAL.pdf

[3] https://www.harriswilliams.com/system/files/industry_update/hw_pt_market_overview_q2_2022.pdf

[4] https://www.prnewswire.com/news-releases/athletico-physical-therapy-expands-presence-in-mississippi-and-oklahoma-301594510.html

[5] Pitchbook, accessed August 2022.

[6] https://www.bizjournals.com/phoenix/blog/health-care-daily/2014/11/accelerated-rehab-centers-acquired-by-athletico.html

[7] https://www.harriswilliams.com/system/files/industry_update/hw_pt_market_overview_q2_2022.pdf

[8] https://www.prnewswire.com/news-releases/upstream-rehabilitation-gains-new-partner-in-louisianas-acts-occupational-and-physical-therapy-301587107.html

[9] https://www.prnewswire.com/news-releases/alliance-physical-therapy-partners-announces-partnership-with-excel-rehab–sports-301584681.html

[10] https://www.prnewswire.com/news-releases/professional-physical-therapy-acquires-complete-ot-and-ota-services-in-elmhurst-301589613.html

[11] https://www.businesswire.com/news/home/20220706005006/en/Akeso-Expands-Its-Presence-in-San-Diego-County-With-the-Purchase-of-WorkPartners-Occupational-Health-Specialists-Dr.-Gene-Ma-to-Join-Akeso%E2%80%99s-Executive-Team-as-Chief-Medical-Officer

[12] Pitchbook, accessed August 2022.

[13] https://ohguides.acoem.org/wp-content/uploads/2019/01/DRAFT_Occupational-Medicine-A-Basic-Guide-08132018.pdf

[14] https://www.nawhc.org/resources/Documents/2021-Worksite-Health-Centers-Report%20(2).pdf

[15] https://www.nawhc.org/resources/Documents/2021-Worksite-Health-Centers-Report%20(2).pdf

[16] Pitchbook, accessed August 2022.