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Physical Therapy EBITDA Multiples: ATI Physical Therapy SPAC Transaction

ATI Physical Therapy announced it was going public via a SPAC transaction with Fortress Value Acquisition Corp. II on February 22, 2021. According to the SEC filings, the transaction values ATI at an enterprise value of $2.5b, which is 14.3x estimated 2022 adjusted EBITDA of $175m and 2.8x estimated 2022 revenue of $903m. Physical therapy has experienced significant disruption from COVID-19, which is apparently why the soliciting material focuses on 2022 figures.

The ~14x forward EBITDA multiple is consistent with a fairly established range for sizeable physical therapy platforms, including the rumored multiples for the Upstream Rehabilitation and Confluent Health deals in 2019 and the reported multiple for the smaller Physical Rehabilitation Network deal in 2020.

The transaction comes after Advent reportedly purchased ATI in a deal valued at $1.9b in 2016, or approximately 13.3x estimated 2016 EBITDA.

Fortress Value Acquisition Corp. II's stock price declined ~13% on the announcement of the deal, close to the $10 redemption value, so we'll see if this one actually closes.


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