Phoenix deal to fuel new growth
Indiana-based Phoenix Rehabilitation and Health Services Inc. has recapitalized through acquisition by a private equity firm.
According to the company, the deal with Pittsburgh’s 3 Rivers Capital will help fuel expansion into new geographic markets as well as support the addition of supplementary services.
“We see tremendous opportunities on the horizon for our industry. The infusion of capital, as well as the financial and strategic expertise that 3 Rivers provides, will position us to capitalize on these opportunities,” said Phoenix Rehabilitation President and CEO David Watson.
Founded in 1997, Phoenix Rehabilitation is a provider of outpatient physical therapy, occupational therapy and occupational health services, such as employment physicals and drug screens.
Watson declined to discuss the numbers behind the deal, which was announced last week, but the Pittsburgh Business Times reported that it was a $7.65 million recapitalization.
Watson, one of Phoenix Rehabilitation’s founders, said the company has been growing by opening new centers. There are some geographic markets it would like to enter, he said, but it can’t because it is blocked by the presence of strong, established competitors.
Therefore, as the company sees it, the only way in is to buy them out, he said.
But its capital structure prior to the deal was such that it didn’t have the ability to make those sorts of moves, he said.
Now they can, he said, and they already have a few potential targets in mind. Although he declined to elaborate, he noted that northeastern, northwestern and south-central Pennsylvania are areas where Phoenix doesn’t have much of a presence, if at all.
The company has roughly 50 outpatient centers throughout Pennsylvania, two locally.
Watson said his company connected with 3 Rivers after Phoenix began shopping itself around, a task that fell to its adviser, Bruderman Brothers Inc., of New York.
And for its part, 3 Rivers had, for several years, been interested in making an investment in the physical therapy sector.
“After reviewing numerous investment opportunities, Phoenix was the most attractive,” said Rob Carskadden, a managing director at 3 Rivers, in a statement.
“The company’s experienced management team and therapists’ patient-centered focus and superior patient outcomes are impressive.”
Phoenix employs roughly 40 people at its Indiana headquarters, and more than 200 companywide.
Watson said the company will likely add positions as a result of the deal.