ATI Physical Therapy to repay debt with Fortress Value merger

By Sara Rosenberg

New York, Feb. 22 – ATI Physical Therapy plans to pay down existing debt using proceeds from its merger with Fortress Value Acquisition Corp. II, a special purpose acquisition company, according to an 8-K filed with the Securities and Exchange Commission on Monday.

Total debt is expected to be reduced to $470 million from $1.011 billion.

Pro forma total debt coming out of the transaction will result in a 2021 net leverage ratio of 3.1x, and the company expects to delever to 2.1x in 2022.

Cash proceeds raised will consist of Fortress Value’s cash in trust of $345 million and a fully committed common stock PIPE of $300 million.

Also, Advent International and other existing common equity holders of ATI, including management, will roll about $1.3 billion of investment holdings into equity of the combined company.

And, ATI’s preferred equity holders will convert about $130 million of existing stake into equity of the combined company.

Closing is expected in the second quarter, subject to, among other customary conditions, approval by Fortress Value stockholders and Fortress Value having minimum cash of $472.5 million.

ATI is a Bolingbrook, Ill.-based physical therapy organization.

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