The PT Acquirer Most Owners Don't Know Exists
A family office has completed five transactions in about fifteen months. Paul Martin explains how family office acquirers compare to strategic partners backed by private equity on time horizon, structure, and fit.
Full transcript
Generated from the episode audio and lightly edited for readability.
There's a buyer in our space that's done five deals in about fifteen months. They did a transaction in Omaha, in Raleigh, in Texas, in Alabama, and most recently in Wisconsin. And it's not a strategic acquirer backed by private equity. It's a family office. So let's talk a little bit about that because I'm not sure a lot of owners even know that this option exists.
Now, look, most of the deals that we do are with strategic partners backed by private equity, and that has been true for years, and it has worked out really well for a lot of owners. These companies have capital. They have systems. They have people who have done this hundreds of times. And a lot of the owners we have seen get that second bite of the apple, meaning you keep equity or you roll equity at the time that you sell your company, and then you get paid again in the future based on the growth of that equity.
So trust me, this is not me knocking that model. Not at all. What I'm saying here is that there is another type of acquirer that has showed up in this industry, and that just means more great options for you. So let's start with what is a family office? It is fairly simple. It's a wealthy family investing its own money.
It's not the typical fund. In some cases, there are outside individual investors as well as potentially other families investing. But there does not tend to be that clock that is running when a family office needs to get their money back at the initiation of a transaction. And that's really the big difference.
A strategic partner that is backed by private equity very commonly is working on a timeline. Typically, that's five years, maybe it's seven years, and then there's some form of a recap or a sale of that business. That's how that model works, and it's how you get the second bite of the apple in most cases.
A family office, they might hold a business or a number of businesses for ten or twenty years or forever. So let me give you an example of a family office that is now invested heavily in physical therapy. It's called Intune Physical Therapy. They're based in Tennessee, and they're owned by a company called Highland Ventures, and that is a family business that goes back more than seventy-five years.
Now, here's the part that I really find interesting. That same family runs the largest Marco's Pizza franchise group in the entire country, and they are a big commercial real estate company as well. So the founders and the folks involved in this company, they're operators, and they know how to run a business.
And look what they've done lately. In July of last year, again, acquired two clinics in Omaha. January, this past January, six in Raleigh. In March, seven in Texas. In April, three in Huntsville, Alabama. And then just a few weeks back, four in western Wisconsin. Now, their last announcement put them at twenty-three clinics in five states, but our team thinks they are actually up to twenty-six clinics.
We will find that out in the next coming couple weeks when we talk to them. So folks, this is not a family that is dabbling. This is a family that is serious about investing in physical therapy. So how is this different for you? I wanna look at three points that could make this a different type of exit strategy than the traditional strategic backed private equity.
So first of all, number one is the time horizon. With a family office, there's usually no planned exit down the road, and that can mean more stability for you and your team, but it also means less of a second bite of the apple upside that you get when you partner with a strategic backed by private equity.
So when you're pursuing your options, that's gonna be a big decision. Number two is structure. How much cash will there be at closing? Is there any equity rollover opportunity? And what's that equity worth if nobody's planning on some form of a recap or a sale in the future? So these are some real questions, and the answers aren't the same for every seller.
And number three, fit. Some owners literally light up when they hear family-owned and long-term hold. Others want the resources and the speed that a bigger platform brings. So that really depends on you, depends on your team, and it really depends on what you want the next five to 10 years to really look like.
I think the biggest takeaway here is that we are now seeing not just more buyers in the rehabilitation industry for your business, but more types of buyers for your business. That increases the competition, and that will eventually get you the best deal. And what gets you the best deal? First and foremost, a culture match.
Second, a structure that works for you, and third is price. So I'm gonna start working on getting the folks from Intune on this podcast. I really want them to tell you in their very own words how their structure works and what makes their deals unique. So if you find this all very interesting, I wanna thank you for joining us today, and if you have any questions or you'd just like to talk about which type of partner might fit you and your business, just click below and let's talk.
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