ATI Physical Therapy Announces Commencement of Tender Offer to Purchase Up to 1,650,000 Shares of its Class A Common Stock at a Purchase Price of $2.85 per Share
PR Newswire
BOLINGBROOK, Ill., Dec. 17, 2024
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including the provisions related to proration in the event that the number of Shares properly tendered and not properly withdrawn exceeds 1,650,000.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 Tenders of Shares must be made prior to the expiration of the tender offer and may be withdrawn at any time prior to the expiration of the tender offer.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$(TM)$, 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;
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