Select Medical Holdings Corporation’s SEM wholly-owned subsidiary, Concentra Group Holdings Parent, Inc., has initiated a roadshow for the initial public offering (“IPO”) of 22.5 million shares of its common stock. The unit plans to provide the underwriters with a 30-day option to purchase up to an additional 3.375 million shares of its common stock to cover any over-allotments. The IPO price range is anticipated to be between $23.00 and $26.00 per share.
Concentra has received approval to list its common stock on the New York Stock Exchange under the ticker symbol "CON." The IPO is contingent on market and other conditions, with no guarantees regarding its completion, size or terms.
Select Medical will hold around 104 million shares of Concentra's common stock, upon the completion of the IPO, equating to 82.23% of the unit’s total outstanding shares (or 80.09% if the underwriters fully exercise their over-allotment option).
Select Medical partnered with private equity firm Welsh, Carson, Anderson & Stowe XII, L.P. to acquire Concentra from Humana HUM in 2015. However, at the beginning of this year, SEM unveiled plans to separate Concentra, aiming to establish it as a new publicly traded entity by the end of 2024.
It obtained a private letter ruling from the U.S. Internal Revenue Service on Feb 27, 2024, confirming that the distribution of Concentra's common stock to Select Medical and its stockholders will be tax-free for U.S. federal income tax purposes. Almost a month later, Concentra confidentially submitted a draft registration statement on Form S-1 to the SEC concerning the proposed IPO of its common stock.
The separation move undertaken by Select Medical reinforces an intensified focus on boosting shareholder value and addressing its strategic priorities, thereby sustaining its solid reputation of being a leading healthcare services provider across the United States. Select Medical boasted an extensive treatment network, consisting of 107 critical illness recovery hospitals, 33 rehabilitation hospitals and 1,925 outpatient rehabilitation clinics across 39 states and the District of Columbia as of Jun 30, 2024. Concentra accounted for around 26% of SEM’s overall revenues in the first quarter of 2024.
Recently, Select Medical unveiled preliminary estimates for some of Concentra’s second-quarter 2024 metrics. The unit’s net operating revenues are anticipated to be around $477.9 million while income from operations is estimated at roughly $83.9 million.
Shares of Select Medical have gained 25.4% in the past year compared with the industry’s 5.7% growth. SEM currently carries a Zacks Rank #3 (Hold).
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Stocks to Consider
Some better-ranked stocks from the Medical space are Halozyme Therapeutics, Inc. HALO and Enovis Corporation ENOV. While Halozyme Therapeutics sports a Zacks Rank #1 (Strong Buy), Enovis carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Halozyme Therapeutics’ earnings surpassed the Zacks Consensus Estimate in three of the last four quarters and matched the mark once, the average beat being 9.40%. The consensus estimate for HALO’s 2024 earnings and revenues indicates an improvement of 40.8% and 19.3% from the respective 2023 reported figure.
The consensus estimate for Halozyme Therapeutics’ earnings has moved 5.7% north in the past 30 days. Shares of HALO have gained 32.8% in the past year.
Enovis’ earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and matched the mark once, the average surprise being 6.18%. The consensus estimate for ENOV’s 2024 earnings and revenues implies a rise of 9.2% and 24.4%, respectively, from the 2023 reported figure.
The consensus estimate for Enovis’ earnings has moved 1.2% north in the past 60 days. Shares of ENOV have declined 30.5% in the past year.
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Select Medical Holdings Corporation (SEM) : Free Stock Analysis Report
Enovis Corporation (ENOV) : Free Stock Analysis Report
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