Thank You, Tom: 20 Years of Changing PT Owners' Lives

Why retire now? That's my question for you. Why now?

First of all, this is the second time I've retired, okay? I retired in 2007 after we sold our business. It's just a good time, Paul. It's a good time in my life. Our children are grown. They're up, they're out, they're having a blast. They wanna do stuff with us. We moved down to South Carolina for nine months out of the year, and there's just so much to do here.

I just really think, we built the team. The team's ready. I've been planning for this for a couple years, me and you. And so they're ready. There's not gonna be any gap there. And I just think the company's in is a great place to be, right?

When you win the championship, you retire, right? So that's my thinking. There's a lot I wanna do. You know what I thought yesterday morning? I can go and do stuff on Monday mornings now. I've never been able to do that because we always have our staff calls.

And there's a couple things going on Mondays, and I'm thinking, "Hey, I can do that."

You convinced me. I'm not gonna bug you anymore. But me a little bit more, and look, I know these guys, but tell our audience here a little bit more about how you feel about the team that you're leaving behind

Oh, they're great. Look they're younger, right? Okay, which is awesome. Joe's a certified financial analyst. It's the highest you can get. Mike's a CPA, right? And they're both very good financially. But Mike can go into QuickBooks and take a look, and just so many of these PT businesses, they don't know their financials.

They're not recording things right. He could get on the phone with their accountants. Joe, he's sophisticated models, negotiating deals. He's been at my side and, in on every conversation, in on every text, meetings, what's

what makes me chuckle and makes me really happy, when I hear them say something, I think, "They were listening. They were listening."

Yeah

the other day I think Mike said something to Joe "What would Tom do?" And Joe said, "Oh, this is what Tom would do," and be like, "Let's do it," and it's unique, too.

What makes it so helpful for the client and for us and for the process is being able to say, "Hey, Josh," or "Dave, can you take a look at the way they're scheduling patients? 'Cause something's goofy here." Or the ... And we can't figure it out, right? 'Cause we're the finance guys. But they're like, they can go in, they can look at the schedule, they can look at the bills and everything.

"Oh, here's what you got." And so that's the team, right? That's the team. And we're in a great spot. I think it's a really good time for me to get out of the way. Joe's gonna be the managing director. He's ready.

And you know how it is, Paul. Lots of people stay too long, and, I just think the team's ready. Everybody's ready to go to the next step. They're doing great. So it's a good time to stop.

You remember the moment that we decided to work together?

Yeah, we're on a run. It was dark, I think. It was one of those early morning runs. I think Jamie and Ryan were at a party or something. They're our wives. And, Jamie said something to Ryan like, "Hey," "what does your husband do?" "I see him walking the dog at 10:00.

I see him at the bus stop at, 1:30 getting the children. I see him walking the dog again." And she said he's, he retired. He's training for the Ironman." And I think Jamie said geez, Paul runs in the morning. He'd probably want to put them together." And that's how it all started

I actually remember the exact place where we were. You are right, it was dark. We were running on the Moorestown High School track, and we started talking about Shore Capital and this private equity group, and you said, "Yeah, I know them. Yeah, oh yeah, I know them. Oh yeah, I've worked with them."

yeah. Look, the most proud is the client outcomes. We always underpromised over-delivered. I think I frustrated some people that way, but it worked, right? And so that, the deal structures, remember, you had... No one knew what rollover equity was, and no one understood any of that, and, you can roll it into the holding company and all things like that.

But we understood it, right? And in the initial transaction where, maybe they're getting, $10 million in cash proceeds and they're rolling over, 3 to 5 million into some form of equity. So they have this major event where they get, the 10 million, and then their equity is growing for them.

So five years later, seven years later, they're having that same event in the same, amount of money. And so we have a lot. I was thinking about this interview, and we just had so many people that still have so much rollover equity. They're completely into it, into their new partnership or in the new company they're with and their payout is coming.

There were some teary eyes. There were some spouses saying, "Whoa what..." I remember the Delaware deal and somebody's spouse said, when they saw the numbers, they said, "What are you guys into?" And it's like, "We're PTs," so I think that was the best.

I think, changing those lives was a lot of fun. Meeting the people were great, right? 95% of them were just great and appreciative and thankful and, So that, those victories were incredible. Still today, we just closed a deal yesterday, and it still feels great.

Every acquirer in this industry knows your name with Martin Healthcare Advisors, separate from Martin Healthcare Advisors as you. How did you do that?

First of all, it's a competitive advantage for our clients, okay? Knowing who the acquirer is, knowing their deal structure, knowing their process, knowing whether or not, when they're giving you the LOI they're inflating the value because they think they're gonna be able to claw some back later on.

That's a huge competitive advantage for our clients. So as you're going through the six or eight LOIs, you're saying, "Yeah, this is okay, but, the deal structure's inferior. The price, they're gonna drive that price down. They're crazy on compliance." It, and so big competitive advantage.

But I think the other thing they did was we never bait and switched anybody. We didn't do that. We said "Here's the deal. Here's the deal we're gonna do," and we did it. And so they got to the point, especially with our confidential information memorandums and the way that we would run our due diligence process, they were confident, right?

And then, and they, look, there's a lot of acquirers out there that would say, "If it's the Martin guys, those numbers are solid. Run on it. We're not gonna have an issue. We'll run the process like they like to run the process." And that gave us great credibility with people.

And, we did have some troubles. I remember You know, right? And we were signing the deal and, the supposedly new partner kinda came at the end, and you know what? I said, "You know what, guys, this doesn't feel right." And they said, "No, it does not feel right."

And we terminated the LOI at literally ... we were gonna sign, and they thought they could jam us. And then everyone took a deep breath. We went back to one or two of the acquirers that were in the deal, right? And we ended up closing the deal in 90 days, right?

And I'll never forget, the CEO of that company that did the deal he called me. He said, what's going on here? Like, how could this deal fall like it fell?" And I said I can't give you the specifics, but here's a scenario for you." And I told him, and he goes, "Wow, these guys got a lot of, you know, credibility.

They got a lot of confidence in themselves and what we're doing." And so he signed the LOI that night, right? So it was having those relationships. And I'll tell you what, there were some tough phone calls, but we always approached it as being fair.

What's a win-win, right? And what's material, what's not material. But always what's in the best interest of the client.

And you caught it, and it was right, and we did the right thing, and that deal ended up getting done to the right acquirer. And yeah, that was a high point for sure.

And for any of you out there that has come across and have crossed paths with Tom, and I don't have to say this, what an absolute incredible impact Tom has had, not only in just our company, but on so many, as you said in the very beginning, so many physical therapy business owners. And so just remember, if you ever have one of those questions that just Joe or Mike are just gonna say, "Look, we gotta punt this thing to Tom, okay? I know he's a long way away, but I can make a quick phone call and Tom you stay available by cellphone for me?"

It could take me three or four days to get back to you, but I'll eventually get back to you

What happened to your 24-hour rule?

The, I'm out now. I don't have any rules

All right, so final question here, Tom. What are you most looking forward to now?

I've gotta figure it out, right? When you're used to working all the time and being available all the time, and I'm a process guy. I like to do, have the coffee, do this, do that, go to the emails and things. So I've gotta kinda blow that whole thing up and try to say, "Okay what are my personal goals," right?

And how do I attain them, making sure everything's congruent with what my wife wants to do. But, I gotta figure it out, Paul, is the honest answer. I think the good thing is, I like to exercise, so I wanna be involved with exercise two, three hours a day.

Intellectually, I've gotta do something. I've got three private investments. I'm on two boards of directors. But eventually that stuff will wind down, too. So I'd love to reinvest in a business down here, but I gotta figure it out

I am sure whatever you figure out will be plentiful and will give you hopefully just a lot of joy especially being able to see your family and spend even more time with them. I guess last thing I will say here is what a great 20-plus years, and I cannot tell you how much we're gonna miss you. So

thank you so much and thanks for giving me the opportunity, and thanks for the, all the fun we had along the way and good luck to you and everybody else.

You got it.

Thanks, Paul