HealthPRO Heritage Acquires LTC Therapy Provider Agility

HealthPRO Heritage, a portfolio company of the private equity firm Beecken Petty O’Keefe, announced on Thursday that it had purchased the long-term care division of Alliance Physical Therapy Management for an undisclosed sum.

The division, Agility Health, provides services to more than 20 long-term care facilities, HealthPRO vice president of mergers and acquisitions Anton Kuznetsov told Skilled Nursing News in an e-mail. The division employs more than 200 therapists, all of whom are expected to be retained over the course of the transaction.

The health care team at the M&A and debt advisory firm Livingstone represented Alliance on the sale of the LTC division, acting as the exclusive investment banker to the Grand Rapids, Mich.-based therapy provider — which is a portfolio company of the New York-based alternative asset management firm GPB Capital.

It’s not the first instance of private equity firms acquiring third-party rehabilitation companies with a focus on post-acute care; an affiliate of the private equity firm H.I.G. Capital acquired Reliant Rehabilitation Holdings, Inc. in September.

And according to Ryan Buckley, a partner at Livingstone, it’s not going to be the last.

“The contract therapy providers to skilled nursing facilities is a space that has actually been in consolidation for a number of years now,” he told SNN.

There are multiple reasons why these companies are attractive to private equity.

“When you look at contract therapy in the skilled nursing channel — as well as in a variety of other channels, such as schools — it’s one where, particularly as we shift to value-based care and the ongoing reimbursement change with the shift to PDPM, scale matters,” Buckley said. “Your ability to have diversification across states and across channels is important. And in order to do that, you need capital.”

HealthPRO provides therapy management and consulting services across the care spectrum and operates in more than 30 states while employing more than 9,000 therapists, according to a statement announcing the sale. The purchase of Agility allows HealthPRO to bolster its presence in Michigan, where it wasn’t as strong, Buckley told SNN.

In addition, the transaction is a good fit for HealthPRO as the skilled nursing industry prepares for the new Patient-Driven Payment Model (PDPM), Kuznetsov said, because Agility and HealthPRO share common values and views on therapy delivery.

“We are firm believers that providers that focus on patient needs and outcomes will be winners,” he said in his message to SNN.

Under PDPM, revenue is expected to decline for some rehab and therapy companies, making it essential for players in the space to make preparations now. HealthPRO has done just that, according to Kuznetsov.

“We look forward to leveraging our expertise and preparedness as we continue to service Agility’s current customer base and look for organic growth opportunities to expand our presence in Michigan and surrounding states,” he said.

That search for opportunity will be happening throughout the industry, according to Buckley.

“The change in the reimbursement landscape from fee-for-service to fee-for-value will only continue to put pressure on those smaller operators,” hey told SNN. “And when that happens, consolidation happens. Those that have that private equity backing and have that opportunity to take advantage of the changing landscape, and take advantage of that financial backing, will be the ones to succeed.”