Full Press Release Details
Holdings Corporation to be Acquired by
by Robert A. Ortenzio, Martin F. Jackson and WCAS
PENNSYLVANIA - March 2, 2026 - Select Medical Holdings Corporation ("Select Medical," "we,"
"us," or "our") (NYSE: SEM) today announced that it has entered into a definitive agreement (the "Merger
Agreement") pursuant to which an entity affiliated with a consortium led by Robert A. Ortenzio, Executive Chairman, Co-Founder
and Director of Select Medical, Martin F. Jackson, Senior Executive Vice President of Strategic Finance and Operations of Select Medical,
and Welsh, Carson, Anderson & Stowe ("WCAS" and, together with Mr. Ortenzio and Mr. Jackson, the "Consortium")
will acquire all of the outstanding shares of common stock of Select Medical not already owned by the Consortium for a price per share
of $16.50 in cash (the "Merger Consideration"), representing an enterprise value of $3.9 billion, on the terms and subject
to the conditions set forth in the Merger Agreement (such transaction, the "Merger"). The Merger Agreement was unanimously
approved by the disinterested members of the Board of Directors of Select Medical (the "Board") upon the recommendation of
a special committee of disinterested and independent directors (the "Special Committee"), which negotiated the terms of the
Merger Consideration represents a premium of approximately 18% over Select Medical's unaffected share price as of November 24,
2025, the last trading day prior to a publicly disclosed proposal being submitted by Mr. Ortenzio to the Company's Board of
Directors, and a premium of approximately 25% over Select Medical's 90-day volume-weighted average closing share price for the
period ending on that date.
Mr. Jackson and certain of their affiliates have agreed to roll over their equity to the parent entity of the surviving corporation
in the Merger in lieu of receiving the cash Merger Consideration. The Consortium may invite other members of management and the Board
of Directors of Select Medical (other than members of the Special Committee) to roll over their outstanding equity as well (all participants
in such roll over, the "Rollover Participants").
Medical will continue to operate as usual during the pendency of the Merger, with the same commitment to its patients, employees and
partners. Select Medical's current management is expected to remain in place following the completion of the Merger. As Mr. Ortenzio
and WCAS are "Permitted Holders" under certain of Select Medical's existing debt documentation, Select Medical expects
its existing indebtedness to remain outstanding following completion of the Merger, facilitating the Consortium's ability to finance
Special Committee, consisting entirely of disinterested and independent members of the Board and advised by its own independent financial
and legal advisors, reviewed and evaluated the Merger Agreement and the transactions contemplated thereby. The Special Committee unanimously
determined that the Merger Agreement and the Merger are fair to, and in the best interests of, Select Medical's stockholders that
are unaffiliated with the Consortium and recommended approval of the Merger Agreement to the Board. The disinterested members of the
Board, acting upon the recommendation of the Special Committee, unanimously approved the Merger Agreement and the Merger and resolved
to recommend that Select Medical's stockholders vote to adopt the Merger Agreement.
Details and Conditions to Closing
Merger is expected to close mid 2026, subject to customary closing conditions, including (a) approval by a majority of the votes
cast by holders of the shares of outstanding Select Medical common stock that are not held by any members of the Consortium, the Rollover
Participants or their affiliates, (b) the expiration or termination of any waiting periods under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 and (c) the receipt of certain other required regulatory approvals. The Merger is not subject to a financing
initial Rollover Participants, which collectively beneficially own approximately 11.8% of the outstanding shares of Select Medical common
stock, have agreed to vote their shares in favor of adoption of the Merger Agreement. Any future Rollover Participants will also agree
to vote their shares in favor of adoption of the Merger Agreement.
completion of the Merger, Select Medical will become a privately held company, and its shares of common stock will be deregistered under
applicable rules of the Securities and Exchange Commission and no longer be listed on the New York Stock Exchange.
foregoing description of the Merger Agreement and the transactions contemplated thereby is subject to, and is qualified in its entirety
by reference to, the full terms of the Merger Agreement, for which Select Medical will file a Form 8-K with the Securities and Exchange
Morgan and Wells Fargo are serving as joint lead arrangers and joint lead bookrunners in connection with the committed debt financing
of the Consortium. Goldman Sachs is serving as the exclusive financial advisor, and Skadden, Arps, Slate, Meagher & Flom LLP
is serving as legal counsel, to the Special Committee. Dechert LLP is serving as legal counsel to Select Medical. Wells Fargo and J.P.
Morgan are serving as financial advisors, and Cravath, Swaine & Moore LLP is serving as legal counsel to, the Consortium. Barclays
is serving as financial advisor, and Ropes & Gray LLP is serving as legal counsel, to WCAS. Paul Hastings LLP is
serving as legal counsel to the debt financing sources.
Medical is one of the largest operators of critical illness recovery hospitals, rehabilitation hospitals, and outpatient rehabilitation
clinics in the United States based on number of facilities. As of December 31, 2025, Select Medical operated 104 critical illness
recovery hospitals in 28 states, 38 rehabilitation hospitals in 15 states, and 1,917 outpatient rehabilitation clinics in 39 states and
the District of Columbia. At December 31, 2025, Select Medical had operations in 39 states and the District of Columbia. Information
about Select Medical is available at www.selectmedical.com.
is a leading U.S. private equity firm focused on two target industries: technology and healthcare. Since its founding in 1979, the firm's
strategy has been to partner with outstanding management teams and build value for its investors through a combination of operational
improvements, growth initiatives, and strategic acquisitions. The firm has raised and managed funds totaling over $33 billion of committed
capital. For more information, please visit www.wcas.com.
Cautionary Statement
Regarding Forward-Looking Statements
release contains forward-looking statements. Forward-looking statements use words such as "expect," "anticipate,"
"outlook," "intend," "plan," "confident," "believe," "will,"
"should," "would," "potential," "positioning," "proposed," "planned,"
"objective," "likely," "could," "may," and words of similar meaning, as well as other
words or expressions referencing future events, conditions or circumstances. Statements that describe or relate to Select Medical's
plans, goals, intentions, strategies, financial outlook, are examples of forward-looking statements. Forward-looking statements are based
on our current beliefs, expectations and assumptions, which may not prove to be accurate, and involve a number of known and unknown risks
and uncertainties, many of which are out of Select Medical's control. Forward-looking statements are not guarantees of future performance
and you should not place undue reliance on Select Medical's forward-looking statements. Forward-looking statements involve significant
known and unknown risks and uncertainties that may cause Select Medical's actual results in future periods to differ materially
from those projected or contemplated in the forward-looking statements. The inclusion of such statements should not be regarded as a
representation that such plans, estimates or expectations will be achieved. There is no assurance that the proposed Merger will be consummated,
and there are a number of risks and uncertainties that could cause actual outcomes and results to differ materially from the results
contemplated by such forward-looking statements, including, without limitation: (1) the inability to consummate the proposed Merger
within the anticipated time period, or at all, due to any reason, including the failure to obtain the required stockholder approval to
adopt the Merger Agreement, the failure to obtain any required regulatory approvals for the proposed Merger, including the termination
or expiration of any required waiting periods, or the failure to satisfy the other conditions to the consummation of the proposed Merger;
(2) the risk that the Merger may be terminated in circumstances requiring Select Medical to pay a termination fee; (3) the
risk that the proposed Merger disrupts Select Medical's current plans and operations or diverts management's attention from
its ongoing business; (4) the effect of the announcement of the proposed Merger on the ability of Select Medical to retain and hire
key personnel and maintain relationships with those with whom it does business; (5) the effect of the announcement or pendency of
the proposed Merger on Select Medical's operating results and business generally; (6) the significant costs, fees and expenses
related to the proposed Merger; (7) the risk that Select Medical's stock price may decline significantly if the proposed Merger
is not consummated; (8) the nature, cost and outcome of any litigation and other legal proceedings, including any such proceedings
related to the proposed Merger and instituted against Select Medical and/or their respective directors, executive officers or other related
persons; (9) other risks that could affect Select Medical's business, financial condition or results of operations, including
those set forth in the Company's most recent Annual Report on Form 10-K and any subsequent filings; and (10) other risks
to the consummation of the proposed Merger. Additional information concerning these and other factors can be found in Select Medical's
filings with the U.S. Securities and Exchange Commission (the "SEC"), including Select Medical's most recent annual
report on Form 10-K. Any forward-looking statement speaks only as of the date on which it is made. Any forward-looking statements,
whether made in this press release or elsewhere, should be considered in the context of the various disclosures made by Select Medical
about its businesses including, without limitation, the risk factors discussed in Select Medical's filings with the SEC. Select
Medical does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information,
future events or otherwise.
Additional Information
and Where to Find it
communication may be deemed to be solicitation material in respect of the proposed acquisition of Select Medical by the Consortium. In
connection with the proposed transaction, Select Medical intends to file relevant materials with the SEC, including Select Medical's
proxy statement on Schedule 14A in preliminary and definitive form for its special meeting of stockholders to approve the proposed transaction,
and may file or furnish other documents with the SEC regarding the proposed transaction from time to time. In addition, Select Medical
and certain affiliates of Select Medical intend to jointly file a transaction statement on Schedule 13E-3 (the "Schedule 13E-3").