Prosthetics maker Hanger to go private in US$1.2B buyout

USA – Hanger, a provider of orthotic and prosthetic patient care services and solutions, has entered into a definitive agreement to be acquired by Patient Square Capital, a dedicated health care investment firm.

Hanger, headquartered in Austin, Texas, provides products and services that assist in enhancing or restoring the physical capabilities of patients with disabilities or injuries.

Under the terms of the agreement, which has been unanimously approved by Hanger’s board, Hanger stockholders will receive US$18.75 in cash per share.

The share price represents an approximately 29% premium to the 30-calendar day volume-weighted average price (VWAP) ending July 20, 2022, and a total enterprise value of approximately US$1.25 billion.

That asking price represents a hefty premium over the company’s recent stock numbers, which haven’t reached that level since the end of April and were hovering about 30% lower, around US$14.75, before the deal was unveiled.

Still, the sticker price is comparable to Hanger’s recent financial performance. In 2021, it raked in just over US$1.12 billion in revenues, up from the previous year’s US$1 billion take.

The company forecasted continued growth for 2022, with the total expected to land somewhere between US$1.19 billion and US$1.22 billion.

The vast majority of Hanger’s earnings come from its patient care segment, which took in more than US$943 million last year, compared to the product and services segment’s US$177 million in net revenues.

Under the terms of the agreement, which has been unanimously approved by Hanger’s board, Hanger stockholders will receive US$18.75 in cash per share.

Upon completion of the transaction, Hanger will become a privately held company, and its common stock will no longer be traded on the New York Stock Exchange (NYSE).

The healthcare sector has outperformed in recent recessionary periods, making them an attractive target for investors looking for assets that can weather a potential downturn, as recession worries grow amid aggressive monetary policy tightening from the Federal Reserve, as per Reuters.

Hangar CEO Vinit Asar expressing his thoughts about the deal stated that it “will result in immediate and substantial value creation for our stockholders.

This transaction represents a culmination of an extensive review by Hanger’s Board of Directors of strategic alternatives to provide value to our stockholders and to offer financial flexibility for our company to pursue future growth initiatives.

The transaction is expected to close in the fourth quarter of 2022, subject to the receipt of stockholder approval, regulatory approvals, and the satisfaction of other customary closing conditions.

Following the close of the transaction, Hanger will continue to be led by Vinit Asar, who has been its president and CEO for more than a decade, and will maintain its headquarters in Austin, Texas.

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