Harvest Partners

Athletico

• Business

  Athletico Management Holdings, LLC ("Athletico") was a leading physical therapy business offering rehabilitation, outreach, and fitness services. The business was founded in 1991 by CEO Mark Kaufman, a licensed physical therapist and certified athletic trainer. Athletico has facilities across the Midwest and employs a team of specialists, which includes physical, and occupational therapists, certified athletic trainers, personal trainers, strength and conditioning specialists and massage therapists. In addition to facility-based rehabilitation services, Athletico provided athletic training, physical and occupational therapy, and fitness services through more than 180 affiliations, including high schools, colleges, and several major sports teams.

• Situation

  In late 2013, Harvest developed this investment opportunity on a proprietary basis. Harvest had identified the outpatient physical therapy sector an attractive niche within healthcare services because it had a large and fragmented market, superior de novo growth opportunity, and an attractive reimbursement profile. Prior to investing, Harvest conducted significant due diligence reviewing many physical therapy businesses.

• Harvest Partners Investment

  In May 2014, Harvest led the recapitalization of Athletico in partnership with management. To fund the acquisition, Harvest arranged the debt financing, including a revolver and term loan. In addition, Harvest underwrote and syndicated co-investment capital.

• Investment Thesis

  • Large, growing, fragmented physical therapy industry
  • Consistent performance at the clinic level
  • Favorable payor mix
  • Proven business strategy, with multiple opportunities for growth
  • Powerful history of growth and high free cash flow generation provides downside protection
  • Management team focused on clinical excellence

• Value Creation

  • Implemented M&A capabilities to transform Athletico from a Chicago-focused provider of physical therapy into a diversified super-regional platform
  • Built dedicated de novo team, expanding annual openings more than four-times
  • Improved infrastructure to make the platform scalable
  • Closed transformative acquisition, more than doubling the size of the business

• Outcome

  • Sold to BDT Capital in December 2016