Hanger Orthopedic Group Inc. (NYSE:HGR) said this week that it will pay $155 million to acquire clinical service provider Accelerated Care Plus Corp.
The Austin, Texas-based company announced the merger agreement with the Reno, Nevada-based ACP on October 18, the same day it released preliminary earnings for the three months ended Sept. 30. Hanger officials said the company plans to fund the buyout with cash on hand and a “concurrent refinancing and expansion of its senior credit facilities,” according to a prepared release. In addition, ACP senior management will also buy approximately 500,000 shares of HGR stock immediately after the merger closes, Hanger said.
Hanger officials said they expect the acquisition will net some $57 million in top line growth during the fourth quarter of 2010.
In order to complete the deal, Hanger priced privately offered senior notes, which are due 2018, with an interest rate of 7.125 percent. Hanger expects the offering to close on Nov. 2.
"This transaction is fully consistent with our strategy to achieve long-term growth through disciplined diversification of our revenue streams, whether through the introduction of additional third-party or Hanger-developed products, new distribution channels, geographic expansion or the broadening of our continuum of care. It is also in line with our vision to be the provider of choice for services and products that enhance human physical capability,” said Hanger CEO Thomas Kirk in prepared remarks.
The company also announced preliminary results for its third quarter, reporting net earnings of $6.9 million, or 21 cents per diluted share, on revenue of $206.7 million during the three months ended Sept 30. That compares with net earnings of $9.6 million, or 30 cents per diluted share, on sales of $192.3 milllion during the same period last year.