Gryphon Investors – AGG Handles Healthcare Regulatory Issues in Acquisition of Outpatient Clinics


Based in San Francisco, Gryphon Investors is a leading private equity firm focused on profitably growing and competitively enhancing middle-market companies in partnership with experienced management. Gryphon sought to acquire CORA Health Services, Inc., a top-10 national operator of outpatient physical therapy services that operates more than 100 outpatient clinics focused in the southeastern U.S. Arnall Golden Gregory, which has deep experience advising on regulatory issues in healthcare M&A deals, was engaged to address the healthcare regulatory aspects of this acquisition.


Working with Gryphon’s M&A counsel, Kirkland & Ellis, AGG’s experienced health regulatory due diligence team advised Gryphon on a broad range of regulatory issues. Team members addressed Stark and anti-kickback compliance matters, limitations on who may have ownership interests in a physical therapy practice, medical director relationships, Medicare enrollment, status of HIPAA compliance, effectiveness of the compliance program, Medicare therapy caps, sales and marketing practices, and OIG exclusion-check practices. AGG’s diligence informed the client’s work on the definitive acquisition agreements and negotiations with lenders on credit agreements and with insurance underwriters of seller’s representations and warranties.


In the transaction, CORA’s management team remained in place and retained a minority stake in the company. Gryphon President Nick Orum said in a press release, “Following on our prior successful investment in this growing sector, we are excited to re-enter the category with an investment in CORA. We look forward to partnering with CEO Dennis Smith and his team to further build the company into a premier regional physical therapy network.” Since the close of the deal, CORA has expanded its presence in the Southeast.