After decades on the NYSE, prosthetics maker Hanger to go private in $1.2B buyout

Over a century into its history—the last several decades of which were spent as a publicly traded company on the New York Stock Exchange—Hanger is set to be acquired in a deal with a healthcare investment company that will make the medical device maker a private company once more.

Hanger, which was founded in 1861 by an injured Civil War soldier, made a name for itself as a manufacturer of orthotic and prosthetic devices. More recently, amid its foray into the public market in the 1990s, the company branched into healthcare services, with a line of rehabilitation clinics that now counts nearly 900 locations across the U.S.

In a buyout deal announced Thursday afternoon, Hanger agreed to be acquired by Patient Square Capital, a Silicon Valley healthcare investment firm that just last month joined in on the $890 million acquisition of the biopharma developer Radius Health and, a month earlier, launched its own $300 million therapeutics-focused startup incubator.

Under the terms of the deal, Patient Square will cough up $18.75 in cash for each of Hanger’s shares. That’ll shake out to a total enterprise value of approximately $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 $14.75, before the deal was unveiled. After Thursday’s announcement, however, shares shot up, opening Friday morning at $18.45.

Still, the sticker price is comparable to Hanger’s recent financial performance. In 2021, it raked in just over $1.12 billion in revenues, up from the previous year’s $1 billion take. The company forecasted continued growth for 2022, with the total expected to land somewhere between $1.19 billion and $1.22 billion.

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

Hanger and Patient Square are expecting to close out the transaction—which was already unanimously approved by Hanger’s board of directors—by the end of this year. At that point, Hanger will exit the NYSE to start a new life as a private company once again. Longtime CEO Vinit Asar will remain in charge, and Hanger will retain its current headquarters in Austin, Texas.

According to Asar, who has been chief executive since May 2012, the acquisition deal “will result in immediate and substantial value creation for our stockholders.”

He continued, “This transaction represents a culmination of an extensive review by our 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.”