Physiotherapy Associates

Physiotherapy Associates logo

Summary

Lender Advisor

Exton, PA

Physiotherapy Associates is a provider of outpatient physical therapy and rehabilitation services, offering specialized treatment plans to help patients recover from injuries, manage chronic conditions, and improve mobility. The company operates clinics across the United States, catering to a wide range of physical therapy needs.

Revenue recognition issues, economic pressures, and healthcare market changes, such as Medicare MPPR reductions and increased managed care, led to financial restatements, covenant violations, and operational challenges.

Carl Marks Advisors (CMA) provided dual-track support, combining operational advisory and investment banking services. The team conducted a comprehensive assessment, including a business line and regional analysis, and reviewed key revenue drivers like patient visits, reimbursement rates, and payor mix. They also monitored liquidity, evaluated operations at the store level, and recommended cost-saving measures.

CMA’s efforts facilitated negotiations with the company and bondholders, resulting in bondholders purchasing bank debt at full value, ensuring complete recovery for the senior lenders.

 

Key Challenges
Financial Restatements
Low Liquidity
Covenant Violations
Complex Capital Structure

Engagement Highlights

  • Engaged to provide dual track operational advisory and investment banking support.
  • Investment banking team engaged in negotiations with the company and bond holders to reach an acceptable outcome for the Senior Lenders.
  • Advisory team prepared a thorough assessment of the Company including a four walls analysis by business line and region.
  • Reviewed the financial projections prepared by the company’s FA and analyzed, evaluated, and sensitized the assumptions around three major drivers of revenue: Patient visits, Reimbursement Rates, and Payor Mix.
    • Monitored liquidity and reviewed operations on a store-by-store level and reviewed closures and potential further cost saving measures.
  • Bondholders ultimately bought the bank debt of 100 cents on the dollar, representing a full recovery for our clients.

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