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Buyout Takes Hanger Private

Investment Firm Patient Square Capital Posed to Help the Company get back to growth

July 27, 2022

A long time resident on the NYSE, Hanger (NYSE: HNGR) is moving to become a private company. Hanger recently announced a buyout by health care investment firm Private Square Capital. The company’s board voted unanimously for the transaction, in which shareholders will receive $18.75 per share, giving the company a total enterprise value of $1.25 billion.

Hanger was my first recommendation at 7investing. It is a great company that designs and manufactures orthotics and prosthetics and manages patient care through its Hanger Clinics. The company was particularly challenged during the COVID-19 pandemic, with its products not being essential enough to put its already compromised customers at risk. The multiple variants of the virus which extended the pandemic well into this year didn’t help. 

Although not growing on its pre-COVID trajectory, the company did continue to see growth. Nothing had changed in my investment thesis and it is always disappointing when an acquisition prevents an investor from seeing their investment thesis play out. That said, the stock price had been, in my opinion, unfairly beaten down and the recent market volatility hasn’t helped. The buyout is intended to give value to shareholders and allow the company to remain focused on providing value-based care to patients. 

Like Hanger, Patient Square Capital places emphasis on patients. The firm invests in health care companies that have products and technologies that improve health and it helps them grow to bring those technologies to patients so improvements in health can be achieved. I do not expect a change in products or at the numerous Hanger Clinics across the country and think that this partnership will enable Hanger to concentrate on providing value to patients without having to worry about providing value to shareholders. Hanger CEO Vinit Asar will continue to lead the company as it works with the Patient Square Capital team. I think this is a great partnership and look forward to seeing how things grow.

As a result of the buyout, 7investing will be selling its shares of Hanger upon the completion of the transaction.

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