Select Medical Holdings Corporation (NYSE:SEM) saw its final trade at $16.51 per share on July 2, a mere penny above the $16.50 cash buyout price, before the New York Stock Exchange suspended trading and initiated delisting proceedings. The merger officially took effect at 12:01 a.m. on July 1, after which the company requested a trading halt prior to the market open.
The deal, valued at approximately $3.9 billion, was led by Executive Chairman and co-founder Robert A. Ortenzio, Senior EVP Martin F. Jackson, and private equity firm Welsh, Carson, Anderson & Stowe (WCAS). Shareholders received $16.50 per share in cash, with the transaction closing at the start of July. The stock last traded at $16.51, reflecting a 0.06% premium to the cash price, with a high of $16.56 before the halt.
S&P Dow Jones Indices removed Select Medical from the S&P SmallCap 600 index, replacing it with Gulfport Energy Corp (NYSE:GPOR) ahead of the July 1 open. Gulfport shares rose 2.25% to $169.13 early Thursday. The index shift moved the sector allocation from health care to energy.
According to SEC filings, all common shares on record before the deal closed, except for rollover, restricted, excluded, and appraisal shares, were cashed at $16.50. Approximately 103 million shares were cashed, totaling about $1.7 billion, with an implied total of 124 million shares. The remaining shares, about 21 million, were rolled over or otherwise excluded. The financing came from equity contributions from WCAS, rollover shares, and external debt.
The special committee, chaired by Daniel J. Thomas, initially rejected a $16.00 per share offer as inadequate. Ortenzio countered that anything above $16.50 was not feasible, leading the committee to finalize the $16.50 price. Goldman Sachs & Co. LLC, advising the committee, deemed the $16.50 cash offer fair from a financial perspective for non-excluded holders.
Select Medical's 2026 guidance, unchanged from April, projected revenue of $5.6 billion to $5.8 billion, adjusted EBITDA of $520 million to $540 million, and fully diluted EPS of $1.22 to $1.32. However, with the cash buyout complete, public shareholders no longer participate in that outlook. The company operates hospitals and rehabilitation clinics, generating steady cash flow.
Hospital sector stocks saw gains on Thursday, with Encompass Health Corp (NYSE:EHC) up 3.25% to $104.68, HCA Healthcare Inc (NYSE:HCA) rising 4.79% to $412.06, Tenet Healthcare Corp (NYSE:THC) gaining 7.22% to $205.00, and Community Health Systems Inc (NYSE:CYH) climbing 6.21% to $3.76. The iShares Russell 2000 ETF (IWM) added 0.90% to $302.02, while the SPDR S&P 500 ETF (SPY) rose 0.68% to $750.83.
