Select Medical to be Acquired by Stonepeak for $1.5B

TL;DR

Stonepeak is buying Select Medical for $1.5B, deal expected to close H1 2025.

AI Summary

Select Medical Holdings Corp. announced on November 18, 2024, that it has entered into a definitive agreement to be acquired by affiliates of certain investment funds managed by Stonepeak Partners L.P. The transaction is valued at approximately $1.5 billion, including the assumption of debt. The deal is expected to close in the first half of 2025, subject to customary closing conditions.

Why It Matters

This acquisition by Stonepeak Partners signifies a major shift in ownership for Select Medical, potentially impacting its strategic direction and operational focus within the healthcare services sector.

Risk Assessment

Risk Level: medium — The acquisition is subject to customary closing conditions, which introduces a degree of uncertainty until the deal is finalized.

Key Numbers

• $1.5B — Transaction Value (Total value of the acquisition, including debt.)

Key Players & Entities

• Select Medical Holdings Corporation (company) — Company being acquired
• Stonepeak Partners L.P. (company) — Acquiring entity
• $1.5 billion (dollar_amount) — Transaction value
• November 18, 2024 (date) — Date of announcement
• first half of 2025 (date) — Expected closing period

FAQ

Key Financial Figures

• $0.001 — ch registered Common Stock, par value $0.001 per share SEM New York Stock Exchange
• $850 million — Holdings Corporation, intends to offer $850 million in aggregate principal amount of senior
• $750 million — nt in the aggregate principal amount of $750 million; extend the tenor of our revolving cr
• $50 million — ng commitment in an aggregate amount of $50 million; and make certain other changes to th

Filing Documents

• tm2428673d1_8k.htm (8-K) — 37KB
• tm2428673d1_ex99-1.htm (EX-99.1) — 297KB
• tm2428673d1_ex99-2.htm (EX-99.2) — 9KB
• tm2428673d1_ex99-2img002.jpg (GRAPHIC) — 31KB
• tm2428673d1_ex99-2img001.jpg (GRAPHIC) — 21KB
• 0001104659-24-119970.txt ( ) — 616KB
• sem-20241118.xsd (EX-101.SCH) — 3KB
• sem-20241118_lab.xml (EX-101.LAB) — 33KB
• sem-20241118_pre.xml (EX-101.PRE) — 22KB
• tm2428673d1_8k_htm.xml (XML) — 4KB

01 Regulation FD Disclosure

Item 7.01 Regulation FD Disclosure Select Medical Corporation (the "Company"), a wholly owned subsidiary of Select Medical Holdings Corporation, intends to offer $850 million in aggregate principal amount of senior notes due 2032. The senior notes will be issued by the Company and will be unconditionally guaranteed by certain of the Company's subsidiaries. The Company intends to use the net proceeds of the offering, together with the proceeds from a new incremental term loan and cash on hand, to repay in full the term loan currently outstanding under its existing credit agreement and to redeem all of its outstanding 6.250% senior notes due 2026. In connection with the repayment, the Company intends to amend its existing senior secured credit facilities in order to, among other things: establish a new incremental term loan under the Company's existing senior secured credit agreement in the aggregate principal amount of $750 million; extend the tenor of our revolving credit facility to five years from the date the senior notes are issued; provide for an incremental revolving commitment in an aggregate amount of $50 million; and make certain other changes to the credit agreement. The terms of the amendments to the Company's senior secured credit facilities are under discussion. Accordingly, their definitive terms may vary from those described above. The senior notes will be issued through a private placement and resold by initial purchasers to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended, and Regulation S. The senior notes will not be registered under the Securities Act and cannot be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This does not constitute an offer to sell or the solicitation of an offer to buy any security in any jurisdiction in which such offer or sale would be unlawful. Cautionary Note Regarding Forward-Looking Statements

01 Other Events

Item 8.01 Other Events On November 18, 2024, Select Medical Holdings Corporation issued a press release announcing the Company had commenced an offering of $850 million aggregate principal amount of senior notes due 2032. A copy of the press release is attached hereto as Exhibit 99.2 and is incorporated herein by reference.

01 Financial

Item 9.01 Financial (d) Exhibits. Exhibit Number Description *99.1 Selected portions of information from an offering memorandum that the Company expects to disclose to investors in connection with its proposed private placement. 99.2 Press Release, dated November 18, 2024, announcing the offering of senior notes due 2032. 104 Cover Page Interactive Data File (embedded with the Inline XBRL) * The information in this Item 9.01 shall not be deemed to be "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section, and shall not be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SELECT MEDICAL HOLDINGS CORPORATION Date: November 18, 2024 By: /s/ Michael E. Tarvin Michael E. Tarvin Senior Executive Vice President, General Counsel and Secretary

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View this 8-K filing on SEC EDGAR