Hanger Orthopedic Group Signs Agreement to Acquire ACP in Merger

Hanger Orthopedic Group Inc. announced the signing of a definitive
merger agreement for the acquisition of Accelerated Care Plus (ACP), a provider
of integrated clinical programs for sub-acute and long-term care rehabilitation
providers based in Reno, Nev. Consideration for the acquisition is
approximately $155 million in cash and ACP is debt free. Hanger intends to fund
the transaction through cash on hand and a concurrent refinancing and expansion
of its senior credit facilities. Senior management of ACP will buy
approximately 500,000 shares of Hanger common stock immediately after
consummation of the transaction.

A new but related growth platform for Hanger, ACP has current contracts
to serve more than 4,000 out of a total market of approximately 15,000 skilled
nursing facilities nationwide, including 22 of the 25 largest national
providers.

Hanger anticipates this transaction will be completed before the end of
2010, subject to customary closing conditions, including regulatory approvals,
as well as the successful completion of Hanger’s planned financing.

“We are very pleased to announce this merger agreement, which joins
two industry leaders in adjacent health care businesses that share
complementary clinical cultures, technology, customers and patient populations.
ACP’s future business prospects are similar to Hanger’s due to its
favorable growth drivers such as: an aging U.S. population, health care reform,
an increased focus on cost, compliance, quality and outcomes … This
transaction is fully consistent with our strategy to achieve long-term growth
through disciplined diversification of our revenue streams, whether through the
introduction of additional third-party or Hanger-developed products, new
distribution channels, geographic expansion or the broadening of our continuum
of care. It is also in line with our vision to be the provider of choice for
services and products that enhance human physical capability. We are confident
of ACP’s strategic and cultural fit with Hanger and of the potential we
have together to drive future growth and shareholder value,” Thomas F.
Kirk, president and chief executive officer of Hanger Orthopedic Group, stated
in a press release.

Hanger expects that the transaction will be accretive to Hanger’s
2011 financial results and, depending on the timing of the transaction’s
closing, to have a neutral to slightly accretive impact on our results for
2010.

“Hanger Orthopedic Group is well-known for their innovative
technologies, effective clinical solutions, and exceptional customer service.
They have grown consistently throughout the economic downturn and have proven
their keen adaptability to flourish in an ever-changing health care
environment. Speaking for myself and on behalf of the other senior leadership
at ACP, we are confident that joining the Hanger family of companies will
provide us with the resources and support we need to help improve quality of
life for more patients and continue our mission of revolutionizing
rehabilitation,” John Beach, president and chief executive officer of ACP,
stated.

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