You have probably seen a lot of changes in our industry in the last 25 years but, more recently, the times are a changing and, thankfully, the corporates are coming.

To give you some context, in 2018 after 20-plus years of growing a large group of physiotherapy clinics, my business partner and I decided it was time to leave the party.

Fortunately, for the first time in our careers, we had some credible choices as part of our exit strategy.

To say we never considered how we would exit when we started is true, but we were lucky an ASX-listed company called Zenitas saw the value in what we had created and purchased a large chunk of the business.

Fast forward to now, they have purchased the remaining shares. The whole process took nearly three and a half years from the initial discussions to the complete buy out, and at times it was exhausting.

To say the corporates do detailed due diligence is, in my opinion, an understatement.

There are probably a few reasons for joining a corporate. Potentially as an exit  strategy or it could help to realise some of  your capital when a member of staff  cannot afford it.

You may be seeking help with back end administration and trying to grow your practice with the assistance of experienced people. It also helps to have a partner to help make decisions with.

All of these are valid reasons and worth considering. But bear this in mind: you  need to do your due diligence as well, and it needs to be just as thorough.

Talk to and visit people, visit clinics, get advice, get a great accountant, get a trustworthy lawyer and be prepared for a long but necessary process.

Preparation on both sides is the key to a successful relationship. Try not to get stressed; it takes time and should not be rushed. But also remember that you can’t always get what you want, so it will take some compromise.

At the moment, I believe there are several major players in this space, and this is quickly changing.

In May 2020,  ex-APA CEO Cris Massis was the head of a group called Advent Health Care, which struggled to get funding and has been put on hold until further notice.

Zenitas (now not an ASX-listed company) is in a phase of system investment to support possible further growth in their physiotherapy stable, which leaves InterHealthcare and another ASX-listed company called Healthia doing the bulk of the current acquisitions.

If you go to the websites of Zenitas, Healthia and InterHealthcare and have a hunt around, you can see the physiotherapy clinics and brands they have acquired. It is fair to say the list is growing.

There are familiar faces at InterHealthcare and Healthia. Jenny Aitkin, who is the chair of the APA Board of Directors, has a senior role with InterHealthcare and Tony Ganter, a well-known physiotherapist in Queensland, has a senior role with Healthia.

There are some smaller entities trying to get a foothold in this space and I am sure there will be more over time. Of interest to a lot of physiotherapists is the fact that InterHealthcare and Healthia will keep the name and brand of your clinic the same.

So, from a patient’s perspective, nothing really changes and often, from a staff perspective, there can be greater career opportunities. In many cases, these corporate entities will fund existing staff to gain equity when traditional financial institutions like the banks potentially would not see the opportunity.

So, are these corporates good for our industry?

In my opinion yes. It was only a matter of time before our industry was seen as a good opportunity by external investors.

What they are doing is taking what we do well, in terms of patient care, and mixing this with the health economy, which is generally predictable. This allows them to add their value in terms of business acumen and capital.

They see our profession, and a few others, as a great place to invest their money and attain growth in value. To date, we are lucky that our industry has been led in most cases by leaders and individuals who have a genuine desire to see ethical, professional and sustainable growth and outcomes.

I am of the view that these corporates make our profession and industry more sustainable and robust in various ways.

Someone said to me that once you get into your 50s, you love giving advice. Maybe that is true, so here comes more.

Do not take your eye off the ball in terms of running your clinic on a day-to-day basis as this will not be a done deal until the contract is signed and the cash is in the bank.

You do not want to assume all is secured, only to find it falls through at the last hurdle. The worst thing to happen is if you have already left the business mentally, you will have to get ‘back on the horse’ again.

There are a few current examples of deals falling over at the last line.

If you get a fair way down the track, ask what your new partner expects of you and let them know what you expect from them. Remember, be honest and hopefully the stars align.

In my experience, all the corporates have a genuine desire to see everyone happy with the deal. After all, you are going into business together and have to work alongside each other daily.

They are also offering quite favourable terms in relation to the value they are prepared to pay for the right clinic and team.

To highlight their reasonableness, they are making the necessary adjustments to valuations in relation to COVID-19. In other words, they realise that COVID-19 for most clinics will only have short-term effects and should not devalue the clinic overall.

Nothing lasts forever. My business partner and I did feel a sense of responsibility to staff and patients that the clinics continued down a successful road long after we departed.

We met with our team and kept them informed and reassured them about the future. Sure, things will change at work; that’s inevitable.

Succession planning and exit strategies take time to ponder and to execute.

Thankfully, for the first time in a generation, we have some credible choices when small, medium or large clinics cannot find future equity holders from within.

We made the right decision, no regrets.

If in doubt, feel free to contact me; I’m happy to point you in the right direction. After all, I’m over 50 (just) and you might find that you get what you need.

>> Antony Hirst has been a physiotherapist since 1992 and has always had a keen interest in private practice sustainability. Antony is the current chair of the Victorian APA Business Group committee and spends his time helping physiotherapy clinics through his consultancy work at Antony Hirst Consulting.