Select Medical enters $16.50/share take-private as Q1 profit falls 14.6% on margin pressure

Filed April 30, 2026 · Period ending March 31, 2026 · Compared to 10-Q May 1, 2025 · ~2 min read

Key Changes

• high

  Definitive merger agreement signed March 2, 2026, with consortium led by Executive Chairman Robert Ortenzio and WCAS. Shareholders (excluding rollover participants) receive $16.50 cash per share. HSR clearance obtained; closing expected mid-2026 subject to stockholder vote (including majority-of-minority) and healthcare regulatory approvals.

  MD&A: Proposed Merger verify on EDGAR →
• high

  Net income declined 14.6% to $63.8M despite 5.0% revenue growth, driven by margin compression in critical illness recovery hospitals (Adjusted EBITDA margin fell from 13.6% to 11.5%) and outpatient rehabilitation (margin fell from 7.9% to 6.8%). Operating costs outpaced revenue and Medicare rate gains.

  MD&A: Financial Results verify on EDGAR →
• high

  One Big Beautiful Bill Act (OBBBA) will reduce Medicaid federal funding by ~$1 trillion over 10 years and cap state directed payments at 100-110% of Medicare rates. Company cannot estimate impact but may experience decreased governmental reimbursement. Congress provided relief from 4% PAYGO sequestration cut for 2026, preserving Medicare payments.

  MD&A: OBBBA Medicaid Impact verify on EDGAR →