Gryphon buys two physical therapy companies as add-ons

The San Francisco-based firm purchased PRORehab PC and Therapy Services of Iowa as add-ons to its physical therapy platform company Accelerated Rehabilitation Centers, which it acquired in April.

Gryphon Investors-backed Accelerated Rehabilitation Centers has made two add-on acquisitions of PRORehab PC and Therapy Services of Iowa, two physical therapy clinic groups for an undisclosed amount.

The firm, which is investing from its $525 million third fund, is building up its physical therapy platform, which is considers a solid bet in the recessionary environment. Gryphon acquired Accelerated and OccuSport Physical Therapy in April for an undisclosed amount.

“This industry has a lot of secular growth characteristics we like … an aging population that wants to age with an active lifestyle. Physical therapy is on the right side of cost containment,” John Rogers, principal with Gryphon, said in an interview. “Getting folks back to work after an injury reduces overall healthcare costs.”

PRORehab operates 19 clinics in and around the greater St. Louis, Missouri region. The company provides outpatient physical and occupational therapy and specialises in hand, manual, aquatic therapies and sports medicine outreach. Therapy Services of Iowa, founded in 1993, operates four clinics in Des Moines, Iowa.

Gryphon negotiated a deal with its lenders at the time of the buyout of Accelerated for the ability to call down additional capital for add-on acquisitions, Rogers said. That structure provided the firm with the necessary capital to make the acquisitions of PRORehab and Therapy Services of Iowa, even in the recessionary environment.

“This debt is part of what we accessed, in addition to additional equity from us,” Rogers said. “That’s what made the difference in getting these deals done.”

Gryphon was founded in 1995 by David Andrews after he left Oak Hill Partners, where he served as managing director. The firm makes investments in the mid-market of $25 million to $75 million for buyouts, leveraged build-ups and growth equity.