Healthcare investment firm Patient Square Capital has signed a definitive agreement to acquire orthotic and prosthetic (O&P) services and solutions provider Hanger for an enterprise value of about $1.25bn.

Hanger, based in Austin, Texas, provides outcomes-based orthotic and prosthetic (O&P) services through its Patient Care segment, with about 875 Hanger Clinic locations across the nation.

Under the agreement, Hanger shareholders will get $18.75 in cash per share, representing about a 29% premium to the 30 calendar day volume-weighted average price (VWAP) ending 20 July 2022.

Upon completion of the deal, which has been unanimously approved by Hanger’s board of directors, Hanger will become a privately held business, and its common stock will not be listed on the New York Stock Exchange (NYSE).

The deal will be financed through a combination of committed equity financing provided by Patient Square Equity Partners as well as committed debt financing to be led by funds managed by Ares Capital Management.

It is anticipated to conclude in the fourth quarter of 2022, subject to the receipt of stockholder approval, regulatory approvals, and the satisfaction of other customary closing conditions.

Upon closing of the deal, Hanger will continue to be led by Vinit Asar, who has been its president and CEO for more than 10 years and operate from its headquarters in Austin, Texas.

Asar said: “I’m very pleased to be announcing this agreement today as the transaction will result in immediate and substantial value creation for our stockholders.

“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.”

Asar added: “Patient Square Capital recognizes the value of our brand and the quality of our world-class team, and is grounded in similar values that guide our actions.

“They share the same long-term vision for our company, which makes them an excellent partner for the next phase of our journey.”