Adam Elberg
CEO and Co-Founder
“Great Point’s professionals, their CEO Advisory Board and Operating Partner helped us with strategy, CFO recruitment, the development of a tuck-in acquisition strategy and in securing an $85 million debt acquisition facility to translate strategy to reality. They knew more about the physical therapy field than any other private equity firm that approached us and were able to leverage that knowledge base into effectively approaching and purchasing acquisition targets.”Sector: Health Care Services
Investment Date: 2011
Description: Orthopedic and Sports Physical Therapy
Status: Acquired by a Financial Sponsor - 2016
Headquarters: Whitestone, NY
Background
Professional Physical Therapy (“ProPT”) was founded by three physical therapy industry veterans, Adam Elberg, George Papadopoulos, and Robert Panariello. They started in a single facility in Queens, New York. Through “best-in-class” treatment and protocols, the founding team was able to recruit and train the top tier of physical therapists in the region and scale to 10 outpatient physical therapy centers throughout the metropolitan New York region before partnering with Great Point Partners. All of their growth was financed by re-investing profits back into their business, in essence, boot-strapping the growth of their business.
Challenges
The ProPT management team had wanted to take their New York based business and expand in nearby states but was concerned about the business and personal financial risk. The founding team saw a fragmented landscape with an attractive opportunity to create value both by expanding organically with new facilities and by acquiring smaller practices but had never completed acquisitions before and didn’t know how to structure or finance them with bank debt. The founders also liked Great Point's growth recapitalization option which enabled the founders to reduce their ownership stake in exchange for cash while providing stock incentives for key employees and adding an equity capital cushion for growth and tuck-in acquisitions.
How Great Point Partners Helped
The ProPT management team was impressed with Great Point's knowledge of the physical therapy space and the extensive sector research Great Point Partners had conducted over the prior 31 months while searching for an ideal physical therapy investment opportunity. Great Point Partners led a $26.6 million equity recapitalization in 2011 and named David Morrison, the former CEO of Mercer Management Consulting and a member of the GPP CEO Advisory Board, as a director. David led the development of the 2012 strategic plan, mapping the market opportunity and subsequent plan of attack. Joe Pesce, Great Point’s Operating Partner, led the search for their first CFO. To execute on ProPT’s strategic growth plan, Great Point introduced a senior lender with whom they had worked previously to fund acquisitions and arranged for an acquisition line that ultimately expanded to over $85 million as ProPT continued to scale.
Results
ProPT continued its annual revenue growth of 30% and completed twenty-one tuck-in acquisitions, nine of which were sourced by Great Point. ProPT is the market leader in providing physical therapy services in the New York, New Jersey, and Connecticut region.