Select Medical Holdings Corporation Announces Pricing of Concentra Group Holdings Parent, Inc. Initial Public Offering

Rhea-AI Summary

Select Medical Holdings (NYSE: SEM) announced the pricing of its subsidiary Concentra Group Holdings Parent, Inc.'s (NYSE: CON) initial public offering (IPO). Concentra is offering 22,500,000 shares at $23.50 per share, with an option for underwriters to purchase an additional 3,375,000 shares. Trading is expected to begin on July 25, 2024, under the symbol 'CON'. After the IPO, Select Medical will retain 82.23% ownership of Concentra (80.09% if the over-allotment option is fully exercised).

Concentra is the largest provider of occupational health services in the U.S., operating 547 occupational health centers in 41 states and 154 onsite health clinics at employer worksites in 37 states as of June 30, 2024. The company serves over 50,000 patients daily, offering occupational and consumer health services.

Positive

• Concentra's IPO is priced at $23.50 per share, potentially raising $528.75 million
• Select Medical will retain majority ownership (82.23%) of Concentra post-IPO
• Concentra is the largest occupational health services provider in the U.S.
• Concentra serves over 50,000 patients daily across 547 health centers and 154 onsite clinics

Negative

• Potential dilution of Select Medical's ownership if underwriters exercise their over-allotment option
• Market risks associated with new stock listings and potential price volatility

Insights

Financial Analyst

The pricing of Concentra's IPO marks a significant milestone for Select Medical Holdings With 22,500,000 shares priced at $23.50 per share, the offering is set to raise approximately $528.75 million before expenses. This substantial capital injection could have far-reaching implications for both Concentra and Select Medical.

Post-IPO, Select Medical will retain a 82.23% stake in Concentra (or 80.09% if the over-allotment option is fully exercised), maintaining significant control while unlocking value for shareholders. This strategic move allows Select Medical to potentially benefit from Concentra's future growth while still consolidating its financial results.

The IPO's success will likely hinge on investor appetite for healthcare services, particularly in the occupational health sector. Concentra's position as the largest provider of occupational health services in the U.S. could be attractive to investors seeking exposure to this niche market.

However, investors should consider the following:

• Market conditions and healthcare sector performance
• Potential regulatory changes affecting occupational health services
• Concentra's growth strategy and ability to maintain market leadership
• The impact of the IPO proceeds on Concentra's balance sheet and future operations

Overall, this IPO represents a strategic financial maneuver that could enhance Select Medical's value proposition while providing Concentra with increased visibility and access to capital markets.

Market Research Analyst

Concentra's IPO is poised to make waves in the occupational health services market. As the largest provider in the U.S., with 547 occupational health centers across 41 states and 154 onsite health clinics, Concentra's public offering could significantly impact the competitive landscape.

The company's extensive network and diverse service portfolio, including occupational and consumer health services, position it well in a market that's increasingly focused on workplace wellness and preventive care. The COVID-19 pandemic has further highlighted the importance of occupational health, potentially driving investor interest in this sector.

Key market considerations include:

• Growing emphasis on employee health and safety in the workplace
• Increasing demand for direct-to-employer care models
• Potential for technological innovations in occupational health services
• Consolidation trends in the healthcare services industry

Concentra's ability to serve over 50,000 patients daily demonstrates its operational scale and efficiency. This IPO could provide the company with additional resources to expand its service offerings, enhance its technology infrastructure, or pursue strategic acquisitions.

For investors, Concentra represents an opportunity to gain exposure to a critical component of the U.S. healthcare system. However, they should also consider potential challenges such as labor market fluctuations, healthcare policy changes and evolving workplace dynamics that could impact demand for occupational health services.

MECHANICSBURG, Pa. and ADDISON, Texas, July 24, 2024 /PRNewswire/ -- Select Medical Holdings Corporation ("Select Medical") (NYSE: SEM) and Concentra Group Holdings Parent, Inc. ("Concentra") (NYSE: CON), a wholly owned subsidiary of Select Medical, today announced the pricing of Concentra's initial public offering ("IPO") of 22,500,000 shares of Concentra's common stock at a price to the public of $23.50 per share. In addition, Concentra has granted the underwriters a 30-day option to purchase up to an additional 3,375,000 shares of its common stock to cover over-allotments, if any. Concentra's common stock has been approved for listing on the New York Stock Exchange under the symbol "CON" and is expected to begin trading on July 25, 2024. The IPO is expected to close on July 26, 2024, subject to the satisfaction or waiver of customary closing conditions.

After the completion of the IPO, Select Medical will own 104,093,503 shares of Concentra's common stock, representing 82.23% of the total outstanding shares of Concentra's common stock (or 80.09% if the underwriters exercise in full their over-allotment option).

J.P. Morgan, Goldman Sachs & Co. LLC and BofA Securities are acting as lead book-running managers for the IPO. Deutsche Bank Securities, Wells Fargo Securities, Mizuho, RBC Capital Markets and Truist Securities are acting as joint book-running managers for the IPO. Capital One Securities, Fifth Third Securities and PNC Capital Markets LLC are acting as co-managers for the IPO.

A registration statement on Form S-1 relating to these securities was declared effective by the Securities and Exchange Commission. The IPO is being made only by means of a prospectus forming part of the effective registration statement. A copy of the prospectus relating to the IPO, when available, may be obtained from: J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, or by email at prospectus-eq_fi@jpmchase.com; Goldman Sachs & Co. LLC, Attention: Prospectus Department, 200 West Street, New York, New York 10282, telephone: 1-866-471-2526, facsimile: 212-902-9316, or email: prospectus-ny@ny.email.gs.com; and BofA Securities, NC1-022-02-25, 201 North Tryon Street, Charlotte, NC 28255-0001, Attention: Prospectus Department, email: dg.prospectus_requests@bofa.com.

This press release is neither an offer to sell nor a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful.

Select Medical Overview

Select Medical is one of the largest operators of critical illness recovery hospitals, rehabilitation hospitals, outpatient rehabilitation clinics, and occupational health centers in the United States based on number of facilities. Select Medical's reportable segments include the critical illness recovery hospital segment, the rehabilitation hospital segment, the outpatient rehabilitation segment, and the Concentra segment. As of June 30, 2024, Select Medical operated 107 critical illness recovery hospitals in 29 states, 33 rehabilitation hospitals in 13 states, 1,925 outpatient rehabilitation clinics in 39 states and the District of Columbia, and 547 occupational health centers in 41 states. At June 30, 2024, Select Medical had operations in 46 states and the District of Columbia.

Concentra Overview

Concentra is the largest provider of occupational health services in the United States by number of locations, with the mission of improving the health of America's workforce, one patient at a time. Our 11,000 colleagues and affiliated physicians and clinicians support the delivery of an extensive suite of services, including occupational and consumer health services and other direct-to-employer care, to more than 50,000 patients each day on average from 547 occupational health centers in 41 states and 154 onsite health clinics at employer worksites in 37 states as of June 30, 2024.

Forward-Looking Statements

Certain statements contained herein that are not descriptions of historical facts are "forward-looking" statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Forward-looking statements use words such as "expect," "estimate," "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. Among other things, statements regarding the expected closing of the IPO, whether the underwriters will exercise their over-allotment option and the expectations relating to the listing of Concentra's common stock on the New York Stock Exchange are examples of forward-looking statements. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements due to factors including the following: the satisfaction of customary closing conditions relating to the IPO, capital market risks and the impact of general economic, industry or financial conditions. A further list and descriptions of these risks, uncertainties and other factors can be found in Concentra's prospectus relating to the IPO and in Select Medical's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, including in the sections captioned "Cautionary Note Regarding Forward-Looking Statements," and in Select Medical's subsequent filings with the U.S. Securities and Exchange Commission. Copies of these filings are available online at www.sec.gov or on request from Concentra or Select Medical. Any forward-looking statement made in this press release speaks only as of the date of this press release. Neither Concentra nor Select Medical undertakes to update any forward-looking statement as a result of new information or future events or developments.

Investor inquiries:

Joel T. Veit
Senior Vice President and Treasurer
717-972-1100
ir@selectmedical.com

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SOURCE Select Medical Holdings Corporation

FAQ

What is the IPO price for Concentra Group Holdings Parent, Inc. (CON) shares?

Concentra Group Holdings Parent, Inc. (CON) shares are priced at $23.50 per share for the initial public offering.

How many shares is Concentra (CON) offering in its IPO?

Concentra (CON) is offering 22,500,000 shares in its initial public offering, with an option for underwriters to purchase an additional 3,375,000 shares.

When will Concentra (CON) begin trading on the New York Stock Exchange?

Concentra (CON) is expected to begin trading on the New York Stock Exchange on July 25, 2024.

What percentage of Concentra will Select Medical Holdings (SEM) own after the IPO?

After the IPO, Select Medical Holdings (SEM) will own 82.23% of Concentra's total outstanding shares, or 80.09% if the underwriters fully exercise their over-allotment option.