Select Medical announces potential separation of Concentra

Select Medical announced that its board of directors has approved a plan to pursue the separation of Select Medical’s wholly-owned occupational health services business, Concentra Group Holdings Parent, LLC. If consummated, the potential separation would create two independent, publicly traded companies positioned for continued growth and market leadership. The potential separation aims to increase stockholder value and focus each company’s strategic priorities on its respective marketplace. The potential separation is intended to be effected in a tax-free manner to Select Medical and its stockholders and be completed in late 2024. It is expected that after the separation, if consummated, Select Medical’s stockholders will retain their current shares of Select Medical and also receive a pro rata distribution of Concentra stock in a transaction that is intended to be tax free to Select Medical and its stockholders for U.S. federal income tax purposes. The number of shares to be distributed and the specific transaction structure will be determined before the potential separation is complete. In connection with the proposed transaction, it is contemplated that Concentra would complete one or more financing transactions, the net proceeds from which will be used to repay intercompany debt or otherwise be distributed to Select Medical Corporation, and which will be used by Select Medical Corporation to repay a portion of its outstanding indebtedness. Select Medical is committed to establishing strong capital allocation strategies for each business that align with each businesses’ long-term goals. Further details about capital structure, governance and other elements of the potential separation will be announced later. Robert A. Ortenzio, Executive Chairman and Co-Founder of Select Medical, stated, “The board and management team regularly evaluate strategic alternatives to maximize 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.”