How a PTA-founded practice grew to 12 clinics and partnered with Confluent Health
Darin Tucker and his business partner opened Peak Physical Therapy in 1999 with virtually no experience and no money. Twenty-two years later, after an Outside-In Assessment and a sale process run by MHA, Peak partnered with Confluent Health on terms Darin calls better than he would have settled for on his own.
Darin on working with MHA
“Martin Healthcare helped me execute my business transaction and gave me back the two things I sacrificed a lot of over the last 25 years: time and money.”
What the process was worth
Calculated from MHA's Outside-In Assessment valuation, the acquirers' indications of interest and the enterprise value of the partnership. Dollar figures are kept private.
No experience, no money and a lot of enthusiasm
Darin always knew he wanted to own. His first job was as an athletic trainer and tech at a physical therapy clinic, where he met his future business partner. That partner planted the seed: in Idaho you didn't need to be a PT to own a practice, so why not become a PTA? In 1999 the two of them opened Peak Physical Therapy.
“Our enthusiasm caused us to jump in with virtually no experience and no money. But we thought, you know what? We can do this. We'll figure it out.”
About two years in, it became clear they were good at PT but didn't understand the business side. They invested in education, and that's when things took off. Darin kept treating full-time for about 23 of his 25 years as an owner, and he did Peak's books himself the whole time.
Everything was at stake
“Someone said, what do you stand to lose? Everything. As an owner, you sleep the business, you wake the business, you stress about it, you smile to it.”
His family
His identity and his family were wrapped up in the business. Getting the exit right meant getting time with them back.
His team
Staff had bought into Darin and into Peak. He never wanted to let anybody down.
Fair value
After 22 years of building, he wanted to know he was exchanged with fairly, not just that he got a number.
Selling the company is always one of your products
In 2014, about eight years before the partnership, Darin started talking with brokers and national players from coast to coast. He wanted to see what acquirers were looking for, then have time to position Peak to be attractive on the business side.
“As an owner, one of your products is always selling your company, always. So that always has to be at the forefront of your thoughts when you're running things.”
When he decided it was time, he reached out to Paul Martin. Paul flew out to Idaho, and the two sat down for lunch to talk about family as well as business. For Darin, that made it an easy decision on the human side. He signed on with MHA in January 2020.
“We need to fish with multiple lines here. We need to use a guide so we get the best catch.”
Seeing Peak the way an acquirer would
Around 2020, Peak started with MHA's Outside-In Assessment, so MHA could look at the organization's performance, build value and make recommendations. After eight years of getting ready, Darin had a solid idea of what buyers wanted. What he didn't have was data on how Peak stacked up.
How Peak compared
Where Peak was strong, where it was weak and what to improve, measured against other organizations Darin had no access to.
Market timing
With a recession and COVID behind them, MHA's contact with the major players helped decide when to go.
The right fit
MHA teed up acquirers who thought the way Darin did. The final decision stayed with him.
“We can do better”
MHA did the talking, set up the on-site meetings and protected Darin from himself. Just as important, the team knew which acquirers had won and lost recent transactions, and which ones were hungry enough to step up.
“At one point, I'd have been totally happy with the EBITDA multiple that we would've gotten. And they were saying, no, we can do better than that. I could never do that.”
MHA built a list of nine acquirers, set up three in-person meetings and brought in two letters of intent. The early indications of interest came in at a level Darin would have accepted. The final value landed about 30% above the highest of them, at a valuation multiple a third higher than the Outside-In Assessment.
MHA also didn't rush him to the door. When Darin felt ready, the team sometimes advised waiting for the market to rebound. The partnership with Confluent Health closed on December 31, 2021.
A CFO's view of the fee
Darin calls himself thrifty. He ran the books, reconciliations and taxes for 25 years, so he put on his CFO hat and ran the numbers on MHA's fee. He had also watched a large Idaho owner decide to sell on his own to save the fee. It went badly and cost that owner far more.
“I looked at it. I re-looked at it. And it's totally worth it. I can tell you, I got a heck of a lot more out of it than I put into it.”
From one PTA-owned clinic to a 12-clinic partnership
Founded
Darin and his business partner open Peak Physical Therapy in Idaho.
Learning the business
Two years in, they invest in business education and growth takes off.
Positioning
Darin starts talking with brokers and national players to see what acquirers want.
Signs with MHA
Paul flies out to Idaho to meet Darin, and Darin signs on with MHA.
Assessment
MHA's Outside-In Assessment benchmarks Peak and builds value.
Partnership
Peak partners with Confluent Health.
What Darin would tell an owner in his shoes
Your limits are self-imposed
As a PTA, there are restrictions, but they don't limit what you can accomplish in physical therapy. Passion will drive you.
Position years ahead
Run the business as if you're always selling it. Darin started eight years early.
Get a guide
An owner's network pales next to an advisor's. The fee buys the market knowledge you can't get on your own.
A real client engagement. Quotes are from Darin Tucker's interview with MHA, lightly edited for length.
About the Peak Physical Therapy transaction
Who did Peak Physical Therapy partner with?
Peak Physical Therapy entered into a strategic partnership with Confluent Health, announced December 31, 2021. Martin Healthcare Advisors was the exclusive financial advisor to Peak.
How big was Peak Physical Therapy?
Twelve clinics: 10 in Idaho and 2 in Washington. Darin Tucker co-founded the private, PTA-owned practice in 1999.
Can a PTA own a physical therapy practice?
Darin did. His future business partner pointed out that in Idaho you did not need to be a PT to own a practice, so Darin became a PTA and they opened Peak together in 1999. Ownership rules vary by state.
When did Darin start working with MHA?
Darin began preparing to sell around 2014, about eight years ahead. He signed with MHA in January 2020 and started MHA's Outside-In Assessment that year. The partnership closed on December 31, 2021.
Was the MHA fee worth it?
Darin ran Peak's books himself for 25 years and says he looked at the fee with his CFO hat on. His verdict: “I got a heck of a lot more out of it than I put into it.”
How did MHA improve the outcome?
MHA ran the conversations with acquirers, set up on-site meetings and knew which buyers were motivated. When Darin would have been happy with an early multiple, the MHA team pushed for a better one. MHA brought nine acquirers to the table, held three in-person meetings and received two letters of intent. The final value came in about 30% above the highest early indication of interest and about 65% above MHA's Outside-In Assessment valuation.
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