Hanger Orthopedic Group, Inc. Announces Cash Tender Offer to Purchase Outstanding 10-1/4% Senior Notes Due 2014

AUSTIN, Texas, Oct. 19 /PRNewswire-FirstCall/ -- Hanger Orthopedic Group, Inc. (NYSE: HGR) today announced that it has commenced a tender offer (the "Offer") to purchase for cash with net proceeds from the New Financing (as defined below) any and all of its outstanding 10 1/4% Senior Notes due 2014, of which a principal amount of $175,000,000 is outstanding (the "Notes").  The terms and conditions of the Offer are described in the Offer to Purchase dated October 19, 2010 (the "Offer to Purchase").  The Offer will expire at 8:00 a.m., New York City time, on November 17, 2010 (such date and time, the "Expiration Date").  The Company currently intends, concurrently with the Offer, to pursue a new $200,000,000 debt financing (the "New Financing").  The Company intends to use the net proceeds from the New Financing together, if necessary, with other available funds, to fund the purchase of the Notes in connection with the Offer and for other corporate purposes.

The "Total Consideration" to be paid for each $1,000 principal amount of Notes that are validly tendered and not withdrawn on or prior to 5:00 p.m., New York City Time, on November 1, 2010 (such date and time, the "Early Tender Date") is $1,056.25, which includes an "Early Tender Premium" of $30.00 per $1,000 principal amount of the Notes validly tendered and not withdrawn.  The consideration to be paid for each $1,000 principal amount of Notes validly tendered and not withdrawn after the Early Tender Date but on or prior to the Expiration Date is $1,026.25 (the "Tender Offer Consideration"), which equals the Total Consideration minus the Early Tender Premium.  The Company may amend, extend, or terminate the Offer at any time in its sole discretion.  Assuming that the Offer is not extended, the Company expects to make payment for the Notes accepted by the Early Tender Date promptly after the date of such acceptance (the "Early Settlement Date") and to make payment for the Notes accepted after the Early Tender Date but on or prior to the Expiration Date promptly after the Expiration Date (the "Final Settlement Date").  In addition to the Total Consideration or the Tender Offer Consideration, as applicable, holders of the Notes who validly tender their Notes in the Offer will also be eligible to receive accrued and unpaid interest from the last interest payment date to, but not including, the Early Settlement Date or the Final Settlement Date, as applicable.  

Tendered Notes may be withdrawn at any time until 5:00 p.m., New York City time, on November 1, 2010.  The Offer is subject to certain conditions, but it is not conditioned on the tender of a minimum principal amount of Notes.

The complete terms and conditions of the Offer are set forth in the Offer to Purchase, along with any amendments and supplements thereto, which holders of the Notes are urged to read carefully before making any decision with respect to the Offer.  Copies of the Offer to Purchase may be obtained from D.F. King & Co., Inc., the depositary and information agent for the Offer (the "Agent"), at (212) 269-5550 (banks and brokers – call collect) or (888) 605-1957 (all others – toll free).  Questions regarding the Offer also may be directed to the dealer managers for the tender offer, BofA Merrill Lynch at (888) 292-0070 (toll free) or (980) 388-9217 (collect) or Jefferies & Company, Inc. at (888) 708-5831 (toll free) or (203) 708-5831 (collect).

About Hanger Orthopedic Group, Inc.

Hanger Orthopedic Group, Inc., headquartered in Austin, Texas, is the world's premier provider of orthotic and prosthetic patient care services. Hanger is the market leader in the United States, owning and operating in excess of 675 patient care centers in 45 states and the District of Columbia, with more than 3,800 employees, including over 1,100 practitioners, as of September 30, 2010.  Hanger is organized into four units. The two key operating units are patient care, which consists of nationwide orthotic and prosthetic practice centers, and distribution, which consists of distribution centers managing the supply chain of orthotic and prosthetic componentry to Hanger and third party patient care centers. The third is Linkia, which is the first and only provider network management company for the orthotics and prosthetics industry. The fourth unit, Innovative Neurotronics, introduces emerging neuromuscular technologies developed through independent research in a collaborative effort with industry suppliers worldwide. For more information on Innovative Neurotronics, Inc. or the WalkAide®, visit http://www.ininc.us. For more information on Hanger, visit http://www.hanger.com.

Forward-Looking Statements

This press release contains statements that the Company believes to be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.  All statements other than statements of historical fact, including, without limitation, statements regarding the Company's future financial position, business strategy, targets, projected sales, costs, earnings, capital expenditures, debt levels and cash flows, and plans and objectives of management for future operations, are forward-looking statements.  When used in this press release, words such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe," "should," "project" or "plan" or the negative thereof or variations thereon or similar terminology are generally intended to identify forward-looking statements.  These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, assumptions and other factors, some of which are beyond the Company's control, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements.  These factors include risks related to the Company's ability to enter into and derive benefits from managed care contracts, the demand for the Company's orthotic and prosthetic services and products and the other factors identified in the Company's periodic reports on Form 10-K and Form 10-Q filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934.  The Company disclaims any intent or obligation to update publicly these forward-looking statements, whether as a result of new information, future events or otherwise.

SOURCE Hanger Orthopedic Group, Inc.