What happened Shares of special purpose acquisition company (SPAC) Fortress Value Acquisition II (NYSE: FAII) were trading sharply lower on Monday, after the SPAC announced a deal to merge with ATI Physical Therapy. As of 2:30 p.m. EST, Fortress Value's shares were down about 13% from Friday's closing price. So what Fortress Value is a SPAC sponsored by Fortress Investment Group, a New York-based private equity and hedge fund manager. ATI Physical Therapy operates over 800 clinics in the United States. The two said on Monday that they have agreed to merge, in a deal that will provide ATI with funding and take it public. Here are the key points of the deal: Assuming it's approved, the merger is expected to bring "up to $645 million" in cash to the post-merger company, which will retain the ATI name. That cash includes a PIPE (for "private investment in public equity") of $300 million, funded by several hedge funds, including some affiliated with Fortress Investment Group. The remaining $345 million is the cash raised by the SPAC in its initial public offering. Advent International and members of ATI's management team are rolling 100% of their existing equity. (Put another way, they aren't cashing out.) Proceeds of the deal will be "primarily used to repay existing debt and preferred equity," the companies said. The combined company will have a valuation of roughly $2.5 billion. ATI Physical Therapy operates nearly 900 physicalntherapy clinics in the U.S. Image source: ATI Physical Therapy. ATI isn't a typical SPAC merger target, in that it's currently owned by private-equity firm Advent International. And while the press release touted the 2.5 million cases in ATI's database and the company's "scalable platform," physical therapy isn't exactly a high-growth, high-tech business. That may be why Fortress Value's stock is down today: As SPAC deals go, this isn't the hot merger that healthcare investors may have been expecting. Now what Put another way, a SPAC sponsored by a private equity firm is merging with a physical therapy company owned by another private equity firm, in a deal that will give the post-merger physical therapy company enough cash to pay off its $541 million in debt. If that all sounds a little funky to you, you're not alone. Assuming that the SPAC's shareholders sign off on this deal, it's expected to close by the end of June. 10 stocks we like better than WalmartWhen investing geniuses David and Tom Gardner have an investing tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now… and Walmart wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks Stock Advisor returns as of 2/1/20The Motley Fool has a disclosure policy.Source