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8-K - FORM 8-K - SELECT MEDICAL HOLDINGS CORP | c02728e8vk.htm |
EX-2.1 - EXHIBIT 2.1 - SELECT MEDICAL HOLDINGS CORP | c02728exv2w1.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
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4714 Gettysburg Road Mechanicsburg, PA 17055 |
|
NYSE Symbol: SEM |
Select Medical Holdings Corporation Announces the Signing of a
Definitive Agreement to Acquire Regency Hospital Company, L.L.C.
Definitive Agreement to Acquire Regency Hospital Company, L.L.C.
MECHANICSBURG, PENNSYLVANIA June 21, 2010 Select Medical Holdings Corporation (NYSE:
SEM), the parent of Select Medical Corporation, today announced the signing of a definitive
agreement to acquire all of the issued and outstanding equity securities of Regency Hospital
Company, L.L.C. (Regency), an operator of long-term acute care hospitals, for approximately $210
million, including certain assumed liabilities. Regency is a portfolio company of Waud Capital
Partners. The purchase price is subject to adjustment based on Regencys net working capital on the
closing date. Regencys net revenue, income from operations, EBITDA (defined as earnings before
interest, income taxes, depreciation and amortization) and net income for the year ended December
31, 2009 was $374.9 million, $16.2 million, $27.7 million (see attached reconciliation) and $6.2
million, respectively.
Regency operates a network of 23 long-term acute care hospitals, located in 9 states. The
transaction, which is expected to close in the third quarter of 2010, is subject to a number of
closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and receipt of certain healthcare regulatory approvals. Upon completion of the
transaction, Select will operate 112 long term acute care hospitals in 28 states.
Select Medical Corporation is a leading operator of specialty hospitals and outpatient
rehabilitation clinics in the United States. As of March 31, 2010, Select Medical Corporation
operated 89 long term acute care hospitals and six acute medical rehabilitation hospitals in 25
states, and 959 outpatient rehabilitation clinics in 36 states and the District of Columbia.
Select Medical Corporation also provides medical rehabilitation services on a contracted basis to
nursing homes, hospitals, assisted living and senior care centers, schools and work sites.
Information about Select Medical Corporation is available at http://www.selectmedicalcorp.com.
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). 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:
| additional changes in government reimbursement for our services, including changes that
will result from the expiration of the moratorium for long term acute care hospitals
established by the SCHIP Extension Act of 2007, the American Recovery and Reinvestment Act,
and the Patient Protection and Affordable Care Act may result in a reduction in net
operating revenues, an increase in costs and a reduction in profitability; |
| the failure of our specialty hospitals to maintain their Medicare certifications as
such may cause our net operating revenues and profitability to decline; |
| the failure of our facilities operated as hospitals within hospitals to qualify as
hospitals separate from their host hospitals may cause our net operating revenues and
profitability to decline; |
| a government investigation or assertion that we have violated applicable regulations
may result in sanctions or reputational harm and increased costs; |
| future acquisitions or joint ventures may prove difficult or unsuccessful, use
significant resources or expose us to unforeseen liabilities; |
| private third-party payors for our services may undertake future cost containment
initiatives that limit our future net operating revenues and profitability; |
| the failure to maintain established relationships with the physicians in the areas we
serve could reduce our net operating revenues and profitability; |
| shortages in qualified nurses or therapists could increase our operating costs
significantly; |
| competition may limit our ability to grow and result in a decrease in our net operating
revenues and profitability; |
| the loss of key members of our management team could significantly disrupt our
operations; |
| the effect of claims asserted against us or lack of adequate available insurance could
subject us to substantial uninsured liabilities; |
| the ability to refinance our outstanding indebtedness before it comes due; |
| the ability to obtain any necessary or desired waiver or amendment from our lenders may
be difficult due to the current uncertainty in the credit markets; |
| the inability to draw funds under our senior secured credit facility because of lender
defaults; and |
| other factors discussed from time to time in our filings with the Securities and
Exchange Commission, including factors under the heading Risk Factors in our annual
report on Form 10-K. |
Reconciliation of Regency Hospital Company, L.L.C.
Net Income to EBITDA
Net Income to EBITDA
Year ended | ||||
December 31, 2009 | ||||
(in thousands) | ||||
(unaudited) | ||||
Net income |
$ | 6,155 | ||
Income taxes |
465 | |||
Interest expense, net of interest income |
9,547 | |||
Depreciation and amortization |
11,495 | |||
EBITDA |
$ | 27,662 | ||
Investor inquiries:
Joel T. Veit
Vice President and Treasurer
717-972-1100
ir@selectmedicalcorp.com
Joel T. Veit
Vice President and Treasurer
717-972-1100
ir@selectmedicalcorp.com
SOURCE: Select Medical Holdings Corporation