Patient Square Capital, LP entered into a definitive agreement to acquire Hanger, Inc. (NYSE:HNGR) from BlackRock, Inc. (NYSE:BLK), The Vanguard Group, Inc., Victory Capital Management Inc., Hotchkis and Wiley Capital Management, LLC and others for approximately $760 million on July 21, 2022. As consideration Hanger stockholders will receive $18.75 in cash per share. Upon completion of the transaction, Hanger will become a privately held company, and its common stock will no longer be traded on the New York Stock Exchange (NYSE). The transaction will be financed through a combination of committed equity financing provided by Patient Square Equity Partners, LP, as well as committed debt financing to be led by funds managed by Ares Capital Management LLC. Patient Square Equity Partners, LP, an affiliate of Parent, has committed to purchase equity interests amounting to $410.0 million in the aggregate on the terms and subject to the conditions set forth in an equity commitment letter. Funds managed by Ares Capital Management LLC (ôAres Fundsö) have committed to provide up to $685.0 million of senior secured credit facilities (comprised of an initial $550.0 million first lien term loan facility, a $35.0 million delayed draw first lien term loan facility and a $100.0 million senior secured revolving credit facility) and a $260.0 million senior secured second lien term loan facility (comprised of an initial $245.0 million second lien term loan facility and a $15.0 million delayed draw second lien term loan facility), on the terms and subject to the conditions set forth in a commitment letter. The obligations of the committing Ares Funds to provide debt financing under the Debt Commitment Letter are subject to a number of customary conditions. If the Merger Agreement is terminated, Hanger shall pay a termination fee of $23.0 million, in case of termination under certain circumstances. Patient Square Capital, LP will pay a termination fee of $45.0 million, in case of termination under certain circumstances. Following the close of the transaction, Hanger will continue to be led by Vinit Asar, HangerÆs President and Chief Executive Officer and will maintain its headquarters in Austin, Texas. Upon closing, Hanger, Inc. Shares will be delisted from the New York Stock Exchange and deregistered under the Securities Exchange Act of 1934, as amended.
The transaction is subject to the receipt of approval of shareholders of Hanger, regulatory approvals, the expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or any other similar approvals and the satisfaction of other customary closing conditions. The agreement has been unanimously approved by HangerÆs Board of Directors. Board of Directors of Patient Square Capital, LP also approved the agreement. The closing of the Merger is not subject to a financing condition. Effective as of 11:59 p.m. Eastern Time on September 1, 2022, the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, expired with respect to the Merger. The transaction has been approved by the shareholders of Hanger on September 30, 2022. The transaction is expected to close in the fourth quarter of 2022.
BofA Securities, Inc. is acting as the exclusive financial advisor to Hanger, and John K. Wilson, David S. Sanders and Mark T. Plichta of Foley & Lardner LLP serving as legal counsels. Ejim Achi, Dmitriy A. Tartakovskiy and Doron Lipshitz of Greenberg Traurig, LLP acting as M&A legal counsels, Kirkland & Ellis LLP is acting as financing legal counsel, and Latham & Watkins LLP is acting as health care legal counsel to Patient Square Capital. Proskauer Rose LLP is acting as financing legal counsel to Ares Capital Management LLC. BofA Securities, Inc. acted as fairness opinion provider to the board of Hanger. Hanger has agreed to pay BofA Securities for its services in connection with the Merger an aggregate fee of approximately $14 million, $1 million of which was payable upon the delivery of its opinion and the remaining portion of which is contingent upon the consummation of the Merger. MacKenzie Partners, Inc. served as proxy solicitor to Hanger and will be paid a fee of $20,000. Computershare Trust Company, National Association served as transfer agent to Hanger.