BOLINGBROOK, Ill., Dec. 17,
2024 /PRNewswire/ -- ATI Physical Therapy, Inc.
(OTCMKTS: ATIP) ("ATI" or the "Company"), a nationally recognized
outpatient physical therapy provider in the United States, announced today that it is
commencing a tender offer to purchase for cash up to 1,650,000
shares of its Class A common stock (the "Shares") at a purchase
price of $2.85 per Share.
The number of Shares proposed to be purchased in the tender
offer represents approximately 37.4% of the Company's currently
outstanding Shares. The closing price of the Shares on December 16, 2024 was $0.73 per share. The $2.85 purchase price per Share represents a
premium of approximately 290% to the closing price per share on
December 16, 2024. The Company will
fund the tender offer with proceeds from the issuance of new notes
in accordance with the Company's amended second lien PIK note
purchase agreement.
Pursuant to the tender offer, the Company's stockholders may
tender all or a portion of their Shares. Stockholders will receive
the purchase price in cash, without interest thereon and subject to
any required tax withholding, subject to the conditions of the
tender offer, including the provisions related to proration in the
event that the number of Shares properly tendered and not properly
withdrawn exceeds 1,650,000. These provisions are described in the
Offer to Purchase and in the Letter of Transmittal relating to the
tender offer that will be distributed to stockholders and were
filed today with the Securities and Exchange Commission (the
"SEC").
The tender offer is conditioned upon a number of terms and
conditions specified in the Offer to Purchase, including the valid
tender without withdrawal of at least 1,565,000 Shares and the
Company's receipt in accordance with the amended second lien PIK
note purchase agreement of funds that are sufficient to fund the
purchase of Shares in the tender offer. The tender offer, proration
period and withdrawal rights will expire at 12:00 midnight, Eastern
Time, at the end of Wednesday, January 15,
2025, unless otherwise extended by the Company. Tenders of
Shares must be made prior to the expiration of the tender offer and
may be withdrawn at any time prior to the expiration of the tender
offer. Stockholders wishing to tender their Shares but who are
unable to deliver them physically or by book-entry transfer prior
to the expiration of the tender offer, or who are unable to make
delivery of all required documents to the depositary prior to the
expiration of the tender offer, may tender their Shares by
complying with the procedures set forth in the Offer to Purchase
for tendering by notice of guaranteed delivery. Innisfree M&A
Incorporated is serving as information agent for the tender offer
and Continental Stock Transfer & Trust Company, LLC is acting
as the depositary for the tender offer.
The Company's Board of Directors has unanimously (upon the
unanimous recommendation of a special committee of independent and
disinterested board members) authorized the tender offer and
recommends that the Company's stockholders accept the tender offer
and tender their Shares pursuant to the tender offer. In deciding
whether to tender their Shares and, if so, how many Shares to
tender, stockholders should read carefully the information in, or
incorporated by reference in, the Offer to Purchase and in the
Letter of Transmittal (as they may be amended or supplemented),
including the purposes and effects of the tender offer.
Stockholders are urged to discuss their decisions with their own
tax advisors, financial advisors and/or brokers.
About ATI Physical Therapy
At ATI Physical Therapy, we are committed to making every life
an active life. We provide convenient access to high-quality care
to prevent and treat musculoskeletal (MSK) pain. Our 850+ locations
in 24 states and virtual practice operate under one of the largest
single-branded platforms built to support standardized clinical
guidelines and operating processes. With outcomes from more than 3
million unique patient cases, ATI strives to utilize quality
standards designed to deliver proven, predictable, and impactful
patient outcomes. From preventative services in the workplace and
athletic training support to outpatient clinical services and
online physical therapy via our online platform, CONNECT™, a
complete list of our service offerings can be found at ATIpt.com.
ATI is based in Bolingbrook,
Illinois.
Additional Information Regarding the Tender Offer
This press release is for informational purposes only and is not
an offer to buy or the solicitation of an offer to sell any Shares.
The offer is being made solely by the Offer to Purchase and the
related Letter of Transmittal, as they may be amended or
supplemented. Stockholders and investors are urged to read the
Company's tender offer statement on Schedule TO filed today with
the SEC in connection with the tender offer, which includes as
exhibits the Offer to Purchase, the related Letter of Transmittal
and other offer materials, as well as any amendments or supplements
to the Schedule TO when they become available, because they contain
important information. Each of these documents has been or will be
filed with the SEC, and investors may obtain them for free from the
SEC at its website (www.sec.gov) or from Innisfree M&A
Incorporated, the information agent for the tender offer, by
telephone at: (888) 750-5835 or in writing to: 501 Madison Avenue,
20th Floor, New York, New York,
10022.
Forward-Looking Statements
All statements other than statements of historical facts
contained in this press release are forward-looking statements
within the meaning of applicable securities laws and regulations.
Forward-looking statements may be identified by the use of the
words such as "believe," "may," "will," "estimate," "continue,"
"anticipate," "intend," "expect," "should," "would," "plan,"
"project," "forecast," "predict," "potential," "seem," "seek,"
"future," "outlook," "target" or similar expressions that predict
or indicate future events or trends or that are not statements of
historical matters. Forward-looking statements are based on the
Company's current expectations and assumptions, which may not prove
to be accurate. These statements are not guarantees and are subject
to risks, uncertainties, and changes in circumstances that are
difficult to predict, and significant contingencies, many of which
are beyond the Company's control, that could cause actual results
to differ materially and adversely from any of these
forward-looking statements.
These forward-looking statements are subject to a number of
risks and uncertainties, including the following:
- the Company's ability to complete the tender offer on terms and
timing described herein, or at all;
- the Company's liquidity position raises substantial doubt about
its ability to continue as a going concern;
- risks associated with liquidity and capital markets, including
the Company's ability to generate sufficient cash flows, together
with cash on hand, to run its business, cover liquidity and capital
requirements and resolve substantial doubt about the Company's
ability to continue as a going concern;
- the Company's ability to meet financial covenants as required
by its Credit Agreement, as amended;
- risks related to outstanding indebtedness and preferred stock,
rising interest rates and potential increases in borrowing costs,
compliance with associated covenants and provisions and the
potential need to seek additional or alternative debt or capital
financing in the future;
- risks related to the Company's ability to access additional
financing or alternative options when needed;
- the Company's dependence upon governmental and third-party
private payors for reimbursement and that decreases in
reimbursement rates, renegotiation or termination of payor
contracts, billing disputes with third-party payors or unfavorable
changes in payor, state and service mix may adversely affect the
Company's financial results;
- federal and state governments' continued efforts to contain
growth in Medicaid expenditures, which could adversely affect the
Company's revenue and profitability;
- payments that the Company receives from Medicare and Medicaid
being subject to potential retroactive reduction;
- changes in Medicare rules and guidelines and reimbursement or
failure of the Company's clinics to maintain their Medicare
certification and/or enrollment status;
- compliance with federal and state laws and regulations relating
to the privacy of individually identifiable patient information,
and associated fines and penalties for failure to comply;
- risks associated with public health crises, epidemics and
pandemics, as was the case with the novel strain of COVID-19, and
their direct and indirect impacts or lingering effects on the
business, which could lead to a decline in visit volumes and
referrals;
- the Company's inability to compete effectively in a competitive
industry, subject to rapid technological change and cost inflation,
including competition that could impact the effectiveness of the
Company's strategies to improve patient referrals and the Company's
ability to identify, recruit, hire and retain skilled physical
therapists;
- the Company's inability to maintain high levels of service and
patient satisfaction;
- risks associated with the locations of the Company's clinics,
including the economies in which the Company operates and the
potential need to close clinics and incur closure costs;
- the Company's dependence upon the cultivation and maintenance
of relationships with customers, suppliers, physicians and other
referral sources;
- the severity of climate change or the weather and natural
disasters that can occur in the regions of the U.S. in which the
Company operates, which could cause disruption to its business;
- risks associated with future acquisitions, divestitures and
other business initiatives, which may use significant resources,
may be unsuccessful and could expose the Company to unforeseen
liabilities;
- risks associated with the Company's ability to secure renewals
of current suppliers and other material agreements that the Company
currently depends upon for business operations;
- failure of third-party vendors, including customer service,
technical and information technology ("IT") support providers and
other outsourced professional service providers to adequately
address customers' requests and meet Company requirements;
- risks associated with the Company's reliance on IT
infrastructure in critical areas of its operations including, but
not limited to, cyber and other security threats;
- a security breach of the Company's IT systems or its
third-party vendors' IT systems may subject the Company to
potential legal action and reputational harm and may result in a
violation of the Health Insurance Portability and Accountability
Act of 1996 or the Health Information Technology for Economic and
Clinical Health Act;
- maintaining clients for which the Company performs management
and other services, as a breach or termination of those contractual
arrangements by such clients could cause operating results to be
less than expected;
- the Company's failure to maintain financial controls and
processes over billing and collections or disputes with third-party
private payors could have a significant negative impact on the
Company's financial condition and results of operations;
- the Company's operations are subject to extensive regulation
and macroeconomic uncertainty;
- the Company's ability to meet revenue and earnings
expectations;
- risks associated with applicable state laws regarding
fee-splitting and professional corporation laws;
- inspections, reviews, audits and investigations under federal
and state government programs and third-party private payor
contracts that could have adverse findings that may negatively
affect the Company's business, including its results of operations,
liquidity, financial condition and reputation;
- changes in or the Company's failure to comply with existing
federal and state laws or regulations or the inability to comply
with new government regulations on a timely basis;
- the Company's ability to maintain necessary insurance coverage
at competitive rates;
- the outcome of any legal and regulatory matters, proceedings or
investigations instituted against the Company or any of its
directors or officers, and whether insurance coverage will be
available and/or adequate to cover such matters or proceedings;
- general economic conditions, including but not limited to
inflationary and recessionary periods;
- the Company's facilities face competition for experienced
physical therapists and other clinical providers that may increase
labor costs, result in elevated levels of contract labor and reduce
profitability;
- risks associated with the Company's ability to attract and
retain talented executives and employees amidst the impact of
unfavorable labor market dynamics, wage inflation and recent
reduction in value of the Company's share-based compensation
incentives, including potential failure of steps being taken to
reduce attrition of physical therapists and increase hiring of
physical therapists;
- risks resulting from the 2L Notes, IPO Warrants, Earnout Shares
and Vesting Shares being accounted for as liabilities at fair value
and the changes in fair value affecting the Company's financial
results;
- further impairments of goodwill and other intangible assets,
which represent a significant portion of the Company's total
assets, especially in view of the Company's recent market
valuation;
- the Company's inability to maintain effective internal control
over financial reporting;
- risks related to dilution of Shares ownership interests and
voting interests as a result of the issuance of 2L Notes and Series
B Preferred Stock;
- costs related to operating as a public company; and
- the impact of the delisting of the Shares from the New York
Stock Exchange.
If any of these risks materialize or the assumptions prove
incorrect, actual results could differ materially from the results
implied by these forward-looking statements. Investors should also
review those factors discussed in the Company' Form 10-K for the
fiscal year ended December 31, 2023
and more recently filed Form 10-Qs under the heading "Risk
Factors," and other documents filed, or to be filed, by the Company
with the SEC. New risk factors emerge from time to time and it is
not possible to predict all such risk factors, nor can the Company
assess the impact of all such risk factors on the business of the
Company or the extent to which any factor or combination of factors
may cause actual results to differ materially from those contained
in any forward-looking statements. All forward-looking statements
attributable to the Company or persons acting on its behalf are
expressly qualified in their entirety by the foregoing cautionary
statements. Readers should not place undue reliance on
forward-looking statements. The Company undertakes no obligations
to publicly update or revise any forward-looking statements after
the date they are made or to reflect the occurrence of
unanticipated events, whether as a result of new information,
future events or otherwise, except as required by law.
In addition, statements of belief and similar statements reflect
the beliefs and opinions of the Company on the relevant subject.
These statements are based upon information available to the
Company, as applicable, as of the date of this communication, and
while the Company believes such information forms a reasonable
basis for such statements, such information may be limited or
incomplete, and statements should not be read to indicate that the
Company has conducted an exhaustive inquiry into, or review of, all
potentially available relevant information. These statements are
inherently uncertain and you are cautioned not to unduly rely upon
these statements.
Contacts
Investor Relations
Scott Rundell
VP, Finance and Head of Investor Relations
ATI Physical Therapy
investors@atipt.com
Media Inquiries
Michael Freitag / Aura Reinhard
Joele Frank, Wilkinson Brimmer
Katcher
212-355-4449
Scott Parent
Director of Communications
ATI Physical Therapy
scott.parent@atipt.com
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