Physiotherapy Associates

Physiotherapy Associates logo


Lender Advisor

Exton, PA

Physiotherapy Associates is one of the nation’s leading providers of outpatient rehabilitation services, at the time operating 580 clinics in 35 states servicing just under 3 million visits per year.

Revenue recognition issues led to a financial restatement and covenant violations. Additionally, economic pressures and changes in the overall healthcare market put downward pressure on rates, including Medicare MPPR (“Multiple Procedure Payment Reduction”), increased managed care, increased use of third-party administrators, and fewer visits per authorization, etc.

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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