Physiotherapy franchise Back in Motion and its New Zealand business Motion Health have sold to ASX-listed Healthia, an allied health group.
Back in Motion founder Jason T. Smith told Inside Franchise Business Executive “This model of sale effectively “de-franchises” our network, forming a new corporatised entity in which our once-franchisees are now holders of a special class of shares in a wholly-owned subsidiary of the listed parent company.
“This is a fantastic result, as other than moving us out of the highly complex sector of franchising, it enables all our practice partners to retain partial ownership in the businesses they helped create and operate.
“We had near unanimous uptake of this offer from a very diverse cohort of people, testament to the attractive terms we were able to negotiate,” he revealed.
The combined enterprise value of this and related transactions is about $125m, with $89m upfront and the balance in deferred or contingent consideration over the next one to three years. Back in Motion generated underlying revenue of $62.9m and underlying EBITDA of $12.3 m in FY21.
The acquisition positions Healthia as the number one provider of physiotherapy services in Australia with a total of 122 physiotherapy clinics in its Bodies & Minds division.
In the deal, all Back in Motion employees, including senior management and the staff across the 64 clinics, will be retained on continuous employment terms.
Smith will continue as group director and an advisory consultant to the board of the parent company for two days a week for the next 12 months to assist in the transition and integration of the business,
“We also retain majority ownership of the software code that underpins the operations of the group, providing an ongoing source of revenue on a subscription basis,” he said.
Smith founded the business with his wife Paulina back in 2001.
“Paulina and I have opted to take a significant portion of our sale proceeds in shares in the new entity, remaining committed to the success of Back In Motion, the very important people who make up our brand, and the wider network we are now part of.
“Franchising has been very good to us and I remain an advocate for it as a distribution model and cultural platform for success,” Smith said.
In 2019 Smith was ranked number two in the inaugural Top 30 Franchise Executives report, after instigating a major overhaul of the business model. Describing himself as an accidental CEO, he discussed this change and his leadership approach in an Inside Franchise Business Executive podcast.
