The healthcare M&A market has been dominated by a surge of SPAC deals, or private companies going public through reverse mergers with a special purpose acquisition company. The deals have usually been in the eHealth and Biotechnology sectors, but now a giant in the Rehabilitation sector is getting in the action. ATI Physical Therapy, the largest single-branded outpatient physical therapy provider in the United States, is merging with Fortress Value Acquisition Corp. II in a $2.5 billion deal. 

ATI owns and operates nearly 900 physical therapy clinics across 25 states. The company generated approximately $178.6 million in adjusted EBITDA for 2020. 

ATI Physical Therapy was a portfolio company of Advent International, which will remain ATI’s largest stockholder and be closely aligned with Fortress and public stockholders at transaction close. According to search results in our Healthcare Deals Database, Advent bought ATI in 2016. 

Existing preferred holders for ATI, including GCM Grosvenor, are also rolling a significant portion of their existing stake. Proceeds from the deal will be primarily used to repay existing debt and preferred equity, delivering financial flexibility to fuel ATI’s significant organic and acquisition growth opportunities. The combined company will operate as “ATI Physical Therapy, Inc.” and remain NYSE-listed under a new ticker symbol. 

Cash proceeds raised will consist of FVAC II’s cash in trust of $345 million and a fully committed common stock PIPE of $300 million at $10.00 per share from institutional investors including Fortress Investment Group LLCWells Capital ManagementWeiss Asset Management and Monashee Investment Management