US-based post-acute recovery and rehabilitation services provider Select Medical Holdings has announced plans to spin off its wholly owned occupational health services business, Concentra Group Holdings Parent (Concentra).
The company's board of directors has approved the separation plan, which aims to establish two independent, publicly traded companies positioned for sustained growth and market leadership.
The primary goal is to increase stockholder value and enable each company to concentrate on strategic priorities within its specific marketplace.
Set to be finalised later this year, the separation is designed to be tax-free for Select Medical and its stockholders.
If the transaction proceeds, Select Medical's stockholders will maintain their current shares in Select Medical and get a pro rata distribution of Concentra stock following the separation.
The specifics, including the number of shares and the transaction structure, will be determined before the separation concludes.
Select Medical executive chairman and co-founder Robert A Ortenzio said: “The board and management team regularly evaluate strategic alternatives to maximise stockholder value, while supporting our overall mission – providing an exceptional patient care experience that promotes healing and recovery in a compassionate environment.
“We are pursuing the potential separation of Concentra with the objective of enhancing success of each business by creating two companies that will be leaders in their respective markets.”
In connection with the proposed transaction, Concentra is expected to undergo one or more financing transactions.
The net proceeds from these transactions will be used to settle intercompany debt or distributed to Select Medical to aid with the repayment of a portion of its outstanding debt.
More details on the separation's capital structure, governance, and other elements are yet to be disclosed.
Select Medical has enlisted JP Morgan as its exclusive financial advisor for the spin-off, while legal counsel is being provided by Dechert.
The timeline and terms of the potential separation have not been finalised yet.
