### SC 13E3 - SC 13E3
SC 13E3
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tm2611660-1_sc13e3.htm
SC 13E3
tm2611660-1_sc13e3 - none - 3.8593989s
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13E-3
RULE 13E-3 TRANSACTION STATEMENT UNDER
SECTION 13(E) OF THE SECURITIES EXCHANGE ACT OF 1934
SELECT MEDICAL HOLDINGS CORPORATION
(Name of the Issuer)
SELECT MEDICAL HOLDINGS CORPORATION
STALLION INTERMEDIATE CORPORATION
STALLION MERGERSUB CORPORATION
STALLION GROUP PARENT, LP
STALLION GROUP PARENT GP, LLC
WCAS XIV, L.P.
WCAS XIV ASSOCIATES LLC
WCAS MANAGEMENT, L.P.
WCAS MANAGEMENT, LLC
ROBERT A. ORTENZIO
MARTIN F. JACKSON
ROCCO A. ORTENZIO REVOCABLE TRUST, DTD 8-14-2007, AS AMENDED
ROBERT A. ORTENZIO DESCENDANTS TRUST
ROBERT A. ORTENZIO APRIL 2014 TRUST FOR BRYAN A. ORTENZIO
ROBERT A. ORTENZIO APRIL 2014 TRUST FOR KEVIN M. ORTENZIO
ROBERT A. ORTENZIO APRIL 2014 TRUST FOR MADELINE G. ORTENZIO
(Names of Persons Filing Statement)
Common Stock, $0.001 par value
(Title of Class of Securities)
81619Q105
(CUSIP Number of Class of Securities)
John F. Duggan
General Counsel & Corporate Secretary
Select Medical Holdings Corporation
4714 Gettysburg Road,
P.O. Box 2034,
Mechanicsburg, PA 17055
(717) 972-1100
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of the Persons Filing Statement)
With copies to
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Minh Van Ngo
Andrew M. Wark
Cravath, Swaine & Moore LLP
Two Manhattan West
375 Ninth Avenue
New York, NY 10001
(212) 474-1000
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Scott A. Abramowitz
Craig E. Marcus
Ropes & Gray LLP
1211 Sixth Avenue
New York, NY 10036
(212) 596 9000
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Stephen Leitzell
Michael Darby
Dechert LLP
Cira Centre
2929 Arch Street,
Philadelphia, PA 19104
(215) 994-4000
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Allison R. Schneirov
Christopher M. Barlow
Skadden, Arps, Slate,
Meagher & Flom LLP
One Manhattan West
New York, NY 10001
(212) 735-3000
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This statement is filed in connection with (check the appropriate box):
a.
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☒
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The filing of solicitation materials or an information statement subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the Securities Exchange Act of 1934.
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b.
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☐
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The filing of a registration statement under the Securities Act of 1933.
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c.
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☐
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A tender offer.
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d.
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None of the above.
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Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: ☒
Check the following box if the filing is a final amendment reporting the results of the transaction: ☐
NEITHER THE SECURITIES EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THIS TRANSACTION, PASSED ON THE MERITS OR THE FAIRNESS OF THE TRANSACTION OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
INTRODUCTION
This Rule 13e-3 transaction statement on Schedule 13E-3, together with the exhibits hereto (this “ Schedule 13E-3 ”), is being filed with the Securities and Exchange Commission (the “ SEC ”) pursuant to Section 13(e) of the Securities Exchange Act of 1934, as amended (together with the rules and regulations promulgated thereunder, the “ Exchange Act ”), jointly by the following persons (each, a “ Filing Person ,” and collectively, the “ Filing Persons ”): (i) Select Medical Holdings Corporation, a Delaware corporation (the “ Company ”), and the issuer of the common stock, par value $0.001 per share (the “ Company Shares ”), that is subject to the Rule 13e-3 transaction, (ii) Stallion Intermediate Corporation, a Delaware corporation (“ Parent ”), (iii) Stallion MergerSub Corporation, a Delaware corporation and a wholly owned subsidiary of Parent (“ Merger Sub ”), (iv) Stallion Group Parent, LP, a Delaware limited partnership (“ Group Parent ”), (v) Stallion Group Parent GP, LLC, a Delaware limited liability company (“ Stallion GP ”), (vi) WCAS XIV, L.P., a Delaware limited partnership (“ WCAS Fund XIV ”), (vii) WCAS XIV Associates LLC (“ Fund XIV GP ”), (vii) WCAS Management, L.P., a Delaware limited partnership (“ WCAS Management ”), (viii) WCAS Management, LLC, a Delaware limited liability company (“ WCAS Management GP ”), and (ix)(a) Robert A. Ortenzio (“ Mr. Ortenzio ”), (b) Martin F. Jackson (“ Mr. Jackson ”), (c) Rocco A. Ortenzio Revocable Trust, dtd 8-14-2007, as amended, (d) Robert A. Ortenzio Descendants Trust, (e) Robert A. Ortenzio April 2014 Trust For Bryan A. Ortenzio, (f) Robert A. Ortenzio April 2014 Trust For Kevin M. Ortenzio and (g) Robert A. Ortenzio April 2014 Trust For Madeline G. Ortenzio (the Filing Persons described in clauses (a) and (c) through (g), the “ Ortenzio Rollover Holders ”, and together with Mr. Jackson, the “ Rollover Holders ”). The Rollover Holders are Filing Persons of this Schedule 13E-3 because they are affiliates of the Company under the SEC rules governing “going-private” transactions.
This Schedule 13E-3 relates to (1) the Agreement and Plan of Merger, dated March 2, 2026 (including all exhibits and documents attached thereto, the “ Merger Agreement ”), by and among the Company, Parent and Merger Sub (collectively referred to as the “ Parties ”), which is attached hereto as Exhibit (d)(i) ; (2) the Rollover Agreements, each dated March 2, 2026 (collectively, the “ Rollover Agreements ”), by and between each Rollover Holder and Parent, which is attached hereto as Exhibits (d)(ii)-(d)(viii) ; (3) the Interim Investors Agreement, dated March 2, 2026 (the “ Interim Investors Agreement ”), by and among Parent, Merger Sub, WCAS XIV, L.P. a Delaware limited partnership (“ WCAS ”), Mr. Ortenzio and Mr. Jackson, which is attached hereto as Exhibit (d)(ix) ; (4) the Equity Commitment Letter, dated March 2, 2026 (the “ Equity Commitment Letter ”), by and between WCAS and Parent, which is attached hereto as Exhibit (d)(x) ; (5) the Limited Guaranty, dated March 2, 2026 (the “ Limited Guaranty ”), by and between WCAS and the Company, which is attached hereto as Exhibit (d)(xi) ; and (6) the Amended and Restated Debt Commitment Letter, dated March 14, 2026 (the “ Amended and Restated Debt Commitment Letter ”), by and among Parent, JPMorgan Chase Bank, N.A., Wells Fargo Bank, National Association, Wells Fargo Securities, LLC, Bank of America, N.A., BofA Securities, Inc., Deutsche Bank AG New York Branch, Deutsche Bank Securities Inc., Truist Bank, Truist Securities, Inc., Royal Bank of Canada, The Bank of Nova Scotia, Mizuho Bank, Ltd., Capital One, National Association, PNC Bank, National Association, PNC Capital Markets LLC and Fifth Third Bank, National Association (collectively, the “ Debt Commitment Parties ”), which is attached hereto as Exhibit (d)(xii) .
On March 2, 2026, the Company entered into the Merger Agreement with Parent and Merger Sub, pursuant to which, subject to the terms and conditions thereof, Merger Sub will merge with and into the Company (the “ Merger ”) with the Company surviving the Merger (the “ Surviving Corporation ”). The Surviving Corporation will be collectively owned, directly or indirectly, by Parent, WCAS, affiliates of WCAS, the Rollover Holders and any other person that may agree to become a Rollover Holder prior to the Effective Time (as defined below) of the Merger.
Subject to the terms and conditions set forth in the Merger Agreement, at the effective time of the Merger (the “ Effective Time ”), each share of Company Shares issued and outstanding immediately prior to the Effective Time (other than (i) Company Restricted Shares (as defined in the Merger Agreement); (ii) each share of Company Shares owned by the Company as treasury stock or owned by any direct or indirect wholly-owned subsidiary of the Company, which shall be automatically canceled without any conversion thereof; (iii) each share of Company Shares otherwise owned by Parent or Merger Sub, any direct or indirect wholly-owned subsidiary of Parent, Merger Sub or the Rollover Holders or, to the extent designated in writing by Parent to the Company, any affiliate of Parent; and (iv) shares of Company Shares owned by stockholders of the Company who properly exercise appraisal rights under Section 262 of the Delaware General Corporation
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Law (“ DGCL ”)) will, at the Effective Time, cease to exist and automatically be converted into the right to receive an amount in cash equal to $16.50 per share (the “ Merger Consideration ”), without interest.
In connection with the Merger and concurrently with the execution and delivery of the Merger Agreement, each of the Rollover Holders entered into Rollover Agreements with Parent. Pursuant to the Rollover Agreements, and subject to the terms and conditions set forth therein, each Rollover Holder will, immediately prior to the Effective Time, contribute all or a portion of the shares of Company Shares held by such Rollover Holders to Parent (such contributed shares, collectively, the “ Rollover Shares ”), and Parent has agreed, concurrently with such contributions, to accept such Rollover Shares in exchange for the issuance by Parent to such Rollover Holder a number of newly issued shares of common stock of Parent equal to the number of Rollover Shares contributed by such Rollover Holder (such exchange, the “ Rollover ”). The Rollover Shares will automatically be canceled without any consideration therefor and will cease to exist at the Effective Time. In connection with entering into the Merger Agreement, on March 2, 2026, Parent, Merger Sub, WCAS, Mr. Ortenzio and Mr. Jackson entered into the Interim Investors Agreement governing the relationship among the parties thereto with respect to the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement. Pursuant to the Rollover Agreements, among other things, each Rollover Holder (a) is prohibited from selling, disposing of, assigning, pledging, collateralizing, encumbering or otherwise transferring any of such Rollover Holder’s Rollover Shares until the Closing (as defined below) without obtaining the prior written consent of Parent and (b) agreed to vote all of the shares of Company Shares beneficially owned by such Rollover Holder at the Special Meeting in favor of the adoption of the Merger Agreement and approval of the Merger and the other transactions contemplated by the Merger Agreement.
In connection with the financing of the Merger and concurrently with the execution and delivery of the Merger Agreement, WCAS has committed to provide to Parent equity financing in an amount up to $880 million, subject to the terms and conditions set forth in the Equity Commitment Letter.
Pursuant to the Limited Guaranty, WCAS has, subject to the terms and conditions contained therein, agreed to pay certain obligations of Parent or Merger Sub under the Merger Agreement, subject to an aggregate cap equal to $143,009,627, including the Parent Termination Fee (as defined in the Merger Agreement) and certain fees and expenses payable by Parent or Merger Sub as specified in the Merger Agreement, if applicable.
In connection with the financing of the Merger, the Debt Commitment Parties agreed to provide Parent, subject to the terms and conditions set forth in the Amended and Restated Debt Commitment Letter, up to $1 billion aggregate principal amount of senior secured increasing rate bridge loans under a new senior secured credit facility (the “ New Revolving Commitments ”) for the purposes of paying the aggregate Merger Consideration and any other amounts required to be paid pursuant to the Merger Agreement at or prior to the consummation of the Merger and any fees, costs and expenses of or payable by Parent and Merger Sub in connection with the Merger and the other transactions contemplated under the Merger Agreement (the “ Debt Financing ”). The obligations of the Debt Commitment Parties to provide the Debt Financing under the Amended and Restated Debt Commitment Letter are subject to a number of customary conditions, including consummation of the Merger. The New Revolving Commitments will be reduced by the amount of gross proceeds available to Parent at Closing to consummate the Merger and the transactions contemplated by the Merger Agreement from debt securities or term loans issued or borrowed by the Company, Parent or their respective subsidiaries on or prior to the Closing Date. As of the time of the filing of this Schedule 13E-3, Parent intends that the Debt Financing will be replaced with $1 billion aggregate principal amount of incremental senior secured term loans borrowed by the Company under the Company’s existing $1.05 billion senior secured tranche B-2 term loan facility due 2031 and $600.0 million senior secured revolving credit facility due 2029 at the Closing in lieu of establishing and drawing upon the New Revolving Commitments.
The proposed Merger is a “going private transaction” under the rules of the Securities and Exchange Commission. If the Merger is completed, the Company will become a privately held company, wholly owned by Parent. Following the Closing, there will be no further market for the shares of Company Shares and, as promptly as practicable following the Effective Time and in compliance with applicable law, the Company Shares will be delisted from the NYSE, deregistered under the Exchange Act and will cease to be publicly traded.
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The board of directors of the Company (the “ Board ”) (i) formed a special committee of the Board comprised solely of independent and disinterested directors of the Company (the “ Special Committee ”) to consider, review, evaluate, negotiate, recommend or approve any potential strategic transactions with potential acquirors and the Company or any other alternative transaction, including maintaining the status quo of the Company as a standalone company, (ii) delegated to the Special Committee, to the fullest extent permitted by law, the full power and authority of the Board, including the power and authority to (A) formulate, establish, oversee, direct and control the process for reviewing, evaluating and negotiating any potential transaction or any alternative thereto (each, a “ Potential Transaction ”), (B) evaluate, negotiate, approve, authorize, reject or recommend any Potential Transaction or any alternative thereto, which delegation, authorization and empowerment included the power under Section 203 of the DGCL to approve for purposes of Section 203 of the DGCL, any Potential Transaction or any alternative thereto and (C) determine not to proceed with any Potential Transaction, (iii) authorized and empowered the Special Committee to do all acts as may be necessary, advisable or appropriate in its judgment to carry out the duties of the Special Committee, (iv) resolved that the Board shall not approve, adopt or recommend any Potential Transaction unless the Special Committee shall have first recommended such Potential Transaction to the Board and (v) authorized the Special Committee to retain, at the Company’s expense, its own independent legal counsel, financial advisors, valuation experts and such other advisors and consultants as the Special Committee deemed necessary or appropriate to assist it in carrying out its duties. The Special Committee with the assistance of its own independent financial and legal advisors, considered, evaluated and negotiated the Merger Agreement and the transactions contemplated thereby, including the Merger. At the conclusion of its review, the Special Committee, among other things, unanimously (1) determined that it is fair to and in the best interests of the Company and the Company’s unaffiliated stockholders for the Company to enter into the Merger Agreement and declared the Merger Agreement and the transactions contemplated thereby advisable and (2) recommended that the Board (x) declare the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger, advisable, (y) adopt the Merger Agreement and approve the Merger and other transactions contemplated by the Merger Agreement and (z) recommend adoption of the Merger Agreement and approval of the Merger and the other transactions contemplated by the Merger Agreement, including the Merger, by the holders of Company Shares.
The disinterested members of the Board, acting upon the unanimous recommendation of the Special Committee, unanimously (i) determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are advisable, fair to and in the best interests of the Company and the holders of Company Shares, including the Company’s unaffiliated stockholders, (ii) adopted the Merger Agreement and approved the execution, delivery and performance of the Merger Agreement by the Company and the consummation of the Merger and the other transactions contemplated by the Merger Agreement, (iii) resolved to recommend that holders of Company Shares, including the Company’s unaffiliated stockholders, adopt the Merger Agreement and approve the transactions contemplated by the Merger Agreement, including the Merger, and (iv) directed that the Merger Agreement be submitted to the holders of Company Shares entitled to vote thereon for adoption thereby.
Under the terms of the Merger Agreement, the adoption of the Merger Agreement requires the affirmative vote of (i) the holders of Company Shares representing a majority of the aggregate voting power of the outstanding Company Shares entitled to vote thereon and (ii) the holders of Company Shares representing a majority of the aggregate voting power of the outstanding Company Shares entitled to vote thereon, excluding any shares of Company Shares beneficially owned by Parent, Merger Sub, each of the Rollover Holders and their respective affiliates, “associates” or members of their respective “immediate family” (as such terms are respectively defined in Rules 12b-2 and 16a-1 of the Exchange Act) (clauses (i) and (ii) collectively, the “ Requisite Company Stockholder Approvals ”). Under the Merger Agreement, the receipt of the Requisite Company Stockholder Approvals is a condition to the Closing, among other conditions as set forth in the Merger Agreement.
Concurrently with the filing of this Schedule 13E-3, the Company is filing with the SEC a preliminary proxy statement (the “ Proxy Statement ”) under Regulation 14A of the Exchange Act, relating to a special meeting of the stockholders of the Company (the “ Special Meeting ”) at which the stockholders of the Company will, among other things, consider and vote upon a proposal to adopt the Merger Agreement and approve the Merger and the other transactions contemplated by the Merger Agreement, including the Merger. A copy of the Proxy Statement is attached hereto as Exhibit (a)(2)(i) and incorporated herein by reference.
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Pursuant to General Instruction F to Schedule 13E-3, the information contained in the Proxy Statement, including all annexes thereto, is incorporated in its entirety herein by reference, and the responses to each item in this Schedule 13E-3 are qualified in their entirety by the information contained in the Proxy Statement and the annexes thereto. The cross-references below are being supplied pursuant to General Instruction G to Schedule 13E-3 and show the location in the Proxy Statement of the information required to be included in response to the items of Schedule 13E-3.
As of the date hereof, the Proxy Statement is in preliminary form and is subject to completion and/or amendment. This Schedule 13E-3 will be amended to reflect such completion or amendment of the Proxy Statement. Capitalized terms used but not expressly defined in this Schedule 13E-3 shall have the respective meanings given to them in the Proxy Statement.
While each of the Filing Persons acknowledges that the Merger is a “going-private” transaction for the purposes of Rule 13e-3 under the Exchange Act, the filing of this Schedule 13E-3 is not intended to be construed as an admission by any Filing Person, or by any affiliate of a Filing Person, that the Company is “controlled” by any of the Filing Persons and/or their respective affiliates.
The information concerning the Company contained in, or incorporated by reference into this Schedule 13E-3 and the Proxy Statement was supplied by the Company. Similarly, all information concerning each other Filing Person contained in, or incorporated by reference into, this Schedule 13E-3 and the Proxy Statement was supplied by such Filing Person. No Filing Person, including the Company, is responsible for the accuracy of any information supplied by any other Filing Person.
Item 1. Summary Term Sheet
The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“ SUMMARY TERM SHEET ”
“ QUESTIONS AND ANSWERS ”
Item 2. Subject Company Information
(a) Name and Address . The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:
“ SUMMARY TERM SHEET ”
“ QUESTIONS AND ANSWERS ”
“ THE PARTIES TO THE MERGER ”
“ IMPORTANT INFORMATION REGARDING THE PURCHASER FILING PARTIES ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY ”
“ WHERE YOU CAN FIND ADDITIONAL INFORMATION ”
(b) Securities . The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“ SUMMARY TERM SHEET ”
“ QUESTIONS AND ANSWERS ”
“ THE SPECIAL MEETING — Record Date; Shares Entitled to Vote; Quorum ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY — Security Ownership of Certain Beneficial Owners and Management ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY — Market Price of the Company Shares ”
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“ IMPORTANT INFORMATION REGARDING THE COMPANY — Dividends ”
(c) Trading Market and Price . The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:
“ SUMMARY TERM SHEET ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY — Market Price of the Company Shares ”
(d) Dividends . The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:
“ IMPORTANT INFORMATION REGARDING THE COMPANY — Dividends ”
(e) Prior Public Offerings . The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:
“ IMPORTANT INFORMATION REGARDING THE COMPANY — Prior Public Offerings ”
(f) Prior Stock Purchases . The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:
“ IMPORTANT INFORMATION REGARDING THE COMPANY — Transactions in Company Shares ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY — Past Contacts, Transactions, Negotiations and Agreements ”
Item 3. Identity and Background of Filing Person
(a) – (c) Name and Address; Business and Background of Entities; Business and Background of Natural Persons. Select Medical Holdings Corporation is the subject company. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“ SUMMARY TERM SHEET ”
“ QUESTIONS AND ANSWERS ”
“ THE PARTIES TO THE MERGER ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY ”
“ IMPORTANT INFORMATION REGARDING THE PURCHASER FILING PARTIES ”
“ WHERE YOU CAN FIND ADDITIONAL INFORMATION ”
Item 4. Terms of the Transaction
(a)(1) Tender Offers . Not Applicable.
(a)(2) Merger or Similar Transactions. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“ SUMMARY TERM SHEET ”
“ QUESTIONS AND ANSWERS ”
“ SPECIAL FACTORS — Background of the Merger ”
“ SPECIAL FACTORS — Reasons for the Merger; Recommendation of the Special Committee and the Company Board ”
“ SPECIAL FACTORS — Unaudited Prospective Financial Information ”
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“ SPECIAL FACTORS — Opinion of the Financial Advisor to the Special Committee ”
“ SPECIAL FACTORS — Purposes and Reasons of the Purchaser Filing Parties ”
“ SPECIAL FACTORS — Position of the WCAS Filing Parties and Parent Entities as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Position of the Rollover Filing Parties as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Plans for the Company After the Merger ”
“ SPECIAL FACTORS — Certain Effects of the Merger ”
“ SPECIAL FACTORS — Certain Effects on the Company if the Merger is Not Completed ”
“ SPECIAL FACTORS — Employment Agreements and Change in Control Agreements with Current Executive Officers ”
“ SPECIAL FACTORS — Equity Award Arrangements with Directors and Executive Officers ”
“ SPECIAL FACTORS — Employment Arrangements Following the Merger ”
“ SPECIAL FACTORS — Financing of the Merger ”
“ SPECIAL FACTORS — Interests of the Company’s Directors and Executive Officers in the Merger ”
“ SPECIAL FACTORS — U.S. Federal Income Tax Considerations of the Merger ”
“ SPECIAL FACTORS — Accounting Treatment ”
“ SPECIAL FACTORS — Litigation Relating to the Merger ”
“ SPECIAL FACTORS — Regulatory Approvals Required for the Merger ”
“ SPECIAL FACTORS — Health Care Licensing ”
“ SPECIAL FACTORS — Delisting and Deregistration of Company Shares ”
“ SPECIAL FACTORS — Fees and Expenses ”
“ THE SPECIAL MEETING ”
“ THE MERGER AGREEMENT ”
“ INTERIM INVESTORS AGREEMENT ”
“ PROVISIONS FOR UNAFFILIATED COMPANY STOCKHOLDERS ”
“ ROLLOVER AGREEMENTS ”
“ Annex A — Agreement and Plan of Merger ”
“ Annex B — Opinion of Goldman Sachs & Co. LLC ”
“ Annex C: Rollover Agreement — Robert A. Ortenzio ”
“ Annex D: Rollover Agreement — Martin F. Jackson ”
“ Annex E: Rollover Agreement — Robert A. Ortenzio Descendants Trust ”
“ Annex F: Rollover Agreement — Rocco A. Ortenzio Revocable Trust, DTD 8-14-2007, As Amended ”
“ Annex G: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Bryan A. Ortenzio ”
“ Annex H: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Kevin M. Ortenzio ”
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“ Annex I: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Madeline G. Ortenzio ”
(c) Different Terms . The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“ SUMMARY TERM SHEET ”
“ QUESTIONS AND ANSWERS ”
“ SPECIAL FACTORS — Plans for the Company After the Merger ”
“ SPECIAL FACTORS — Certain Effects of the Merger ”
“ SPECIAL FACTORS — Interests of the Company’s Directors and Executive Officers in the Merger ”
“ SPECIAL FACTORS — Intent of the Company’s Directors and Executive Officers to Vote in Favor of the Merger ”
“ SPECIAL FACTORS — Intent of Certain Stockholders to Vote in Favor of the Merger ”
“ SPECIAL FACTORS — Purposes and Reasons of the Purchaser Filing Parties ”
“ SPECIAL FACTORS — Position of the WCAS Filing Parties and Parent Entities as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Position of the Rollover Filing Parties as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Certain Effects on the Company if the Merger is Not Completed ”
“ SPECIAL FACTORS — Employment Agreements and Change in Control Agreements with Current Executive Officers ”
“ SPECIAL FACTORS — Equity Award Arrangements with Directors and Executive Officers ”
“ SPECIAL FACTORS — Employment Arrangements Following the Merger ”
“ SPECIAL FACTORS — Financing of the Merger ”
“ SPECIAL FACTORS — Fees and Expenses ”
“ SPECIAL FACTORS — Certain Material Relationships ”
“ THE MERGER AGREEMENT — Effect of the Merger ”
“ THE MERGER AGREEMENT — Merger Consideration ”
“ THE MERGER AGREEMENT — Exchange and Payment Procedures ”
“ THE MERGER AGREEMENT — Indemnification and Insurance ”
“ THE MERGER AGREEMENT — Employee Benefit Matters ”
“ ROLLOVER AGREEMENTS ”
“ PROPOSAL 2: THE COMPENSATION PROPOSAL ”
“ Annex A — Agreement and Plan of Merger ”
“ Annex C: Rollover Agreement — Robert A. Ortenzio ”
“ Annex D: Rollover Agreement — Martin F. Jackson ”
“ Annex E: Rollover Agreement — Robert A. Ortenzio Descendants Trust ”
“ Annex F: Rollover Agreement — Rocco A. Ortenzio Revocable Trust, DTD 8-14-2007, As Amended ”
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“ Annex G: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Bryan A. Ortenzio ”
“ Annex H: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Kevin M. Ortenzio ”
“ Annex I: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Madeline G. Ortenzio ”
(d) Appraisal Rights . The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“ SUMMARY TERM SHEET ”
“ QUESTIONS AND ANSWERS ”
“ THE SPECIAL MEETING — Appraisal Rights ”
“ APPRAISAL RIGHTS ”
“ Annex A — Agreement and Plan of Merger ”
(e) Provisions for Unaffiliated Security Holders. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“ SPECIAL FACTORS — Reasons for the Merger; Recommendation of the Special Committee and the Company Board ”
“ SPECIAL FACTORS — Purposes and Reasons of the Purchaser Filing Parties ”
“ SPECIAL FACTORS — Position of the WCAS Filing Parties and Parent Entities as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Position of the Rollover Filing Parties as to the Fairness of the Merger ”
“ PROVISIONS FOR UNAFFILIATED COMPANY STOCKHOLDERS ”
(f) Eligibility for Listing or Trading . Not Applicable.
Item 5. Past Contacts, Transactions, Negotiations and Agreements
(a) Transactions. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“ SUMMARY TERM SHEET ”
“ SPECIAL FACTORS — Background of the Merger ”
“ SPECIAL FACTORS — Interests of the Company’s Directors and Executive Officers in the Merger ”
“ SPECIAL FACTORS — Certain Effects of the Merger ”
“ SPECIAL FACTORS — Employment Agreements and Change in Control Agreements with Current Executive Officers ”
“ SPECIAL FACTORS — Financing of the Merger ”
“ SPECIAL FACTORS — Intent of the Company’s Directors and Executive Officers to Vote in Favor of the Merger ”
“ SPECIAL FACTORS — Intent of Certain Stockholders to Vote in Favor of the Merger ”
“ SPECIAL FACTORS — Fees and Expenses ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY — Transactions in Company Shares ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY — Past Contacts, Transactions, Negotiations and Agreements ”
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“ IMPORTANT INFORMATION REGARDING THE COMPANY — Prior Public Offerings ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY — Security Ownership of Certain Beneficial Owners and Management ”
“ IMPORTANT INFORMATION REGARDING THE PURCHASER FILING PARTIES ”
“ THE MERGER AGREEMENT ”
“ ROLLOVER AGREEMENTS ”
“ WHERE YOU CAN FIND ADDITIONAL INFORMATION ”
“ PROPOSAL 2: THE COMPENSATION PROPOSAL ”
“ Annex A — Agreement and Plan of Merger ”
“ Annex C: Rollover Agreement — Robert A. Ortenzio ”
“ Annex D: Rollover Agreement — Martin F. Jackson ”
“ Annex E: Rollover Agreement — Robert A. Ortenzio Descendants Trust ”
“ Annex F: Rollover Agreement — Rocco A. Ortenzio Revocable Trust, DTD 8-14-2007, As Amended ”
“ Annex G: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Bryan A. Ortenzio ”
“ Annex H: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Kevin M. Ortenzio ”
“ Annex I: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Madeline G. Ortenzio ”
(b) Significant Corporate Events. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“ SUMMARY TERM SHEET ”
“ QUESTIONS AND ANSWERS ”
“ SPECIAL FACTORS — Background of the Merger ”
“ SPECIAL FACTORS — Reasons for the Merger; Recommendation of the Special Committee and the Company Board ”
“ SPECIAL FACTORS — Purposes and Reasons of the Purchaser Filing Parties ”
“ SPECIAL FACTORS — Position of the WCAS Filing Parties and Parent Entities as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Position of the Rollover Filing Parties as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Plans for the Company After the Merger ”
“ SPECIAL FACTORS — Certain Effects of the Merger ”
“ SPECIAL FACTORS — Employment Agreements and Change in Control Agreements with Current Executive Officers ”
“ SPECIAL FACTORS — Equity Award Arrangements with Directors and Executive Officers ”
“ SPECIAL FACTORS — Employment Arrangements Following the Merger ”
“ SPECIAL FACTORS — Financing of the Merger ”
“ SPECIAL FACTORS — Fees and Expenses ”
“ SPECIAL FACTORS — Interests of the Company’s Directors and Executive Officers in the Merger ”
10
“ SPECIAL FACTORS — Intent of the Company’s Directors and Executive Officers to Vote in Favor of the Merger ”
“ SPECIAL FACTORS — Intent of Certain Stockholders to Vote in Favor of the Merger ”
“ THE MERGER AGREEMENT ”
“ ROLLOVER AGREEMENTS ”
“ INTERIM INVESTORS AGREEMENT ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY — Transactions in Company Shares ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY — Past Contacts, Transactions, Negotiations and Agreements ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY — Prior Public Offerings ”
“ IMPORTANT INFORMATION REGARDING THE PURCHASER FILING PARTIES ”
“ PROPOSAL 1: THE MERGER PROPOSAL ”
“ Annex A — Agreement and Plan of Merger ”
“ Annex C: Rollover Agreement — Robert A. Ortenzio ”
“ Annex D: Rollover Agreement — Martin F. Jackson ”
“ Annex E: Rollover Agreement — Robert A. Ortenzio Descendants Trust ”
“ Annex F: Rollover Agreement — Rocco A. Ortenzio Revocable Trust, DTD 8-14-2007, As Amended ”
“ Annex G: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Bryan A. Ortenzio ”
“ Annex H: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Kevin M. Ortenzio ”
“ Annex I: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Madeline G. Ortenzio ”
“ Annex J: Interim Investors Agreement ”
(c) Negotiations or Contacts. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“ SUMMARY TERM SHEET ”
“ SPECIAL FACTORS — Background of the Merger ”
“ SPECIAL FACTORS — Interests of the Company’s Directors and Executive Officers in the Merger ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY — Past Contacts, Transactions, Negotiations and Agreements ”
“ THE MERGER AGREEMENT ”
“ INTERIM INVESTORS AGREEMENT ”
“ ROLLOVER AGREEMENTS ”
“ Annex A — Agreement and Plan of Merger ”
“ Annex C: Rollover Agreement — Robert A. Ortenzio ”
“ Annex D: Rollover Agreement — Martin F. Jackson ”
“ Annex E: Rollover Agreement — Robert A. Ortenzio Descendants Trust ”
11
“ Annex F: Rollover Agreement — Rocco A. Ortenzio Revocable Trust, DTD 8-14-2007, As Amended ”
“ Annex G: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Bryan A. Ortenzio ”
“ Annex H: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Kevin M. Ortenzio ”
“ Annex I: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Madeline G. Ortenzio ”
“ Annex J: Interim Investors Agreement ”
(d) Conflicts of interest. Not Applicable.
(e) Agreements Involving the Subject Company’s Securities. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“ SUMMARY TERM SHEET ”
“ QUESTIONS AND ANSWERS ”
“ SPECIAL FACTORS — Background of the Merger ”
“ SPECIAL FACTORS — Reasons for the Merger; Recommendation of the Special Committee and the Company Board ”
“ SPECIAL FACTORS — Purposes and Reasons of the Purchaser Filing Parties ”
“ SPECIAL FACTORS — Position of the WCAS Filing Parties and Parent Entities as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Position of the Rollover Filing Parties as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Plans for the Company After the Merger ”
“ SPECIAL FACTORS — Certain Effects of the Merger ”
“ SPECIAL FACTORS — Certain Effects on the Company if the Merger is Not Completed ”
“ SPECIAL FACTORS — Employment Agreements and Change in Control Agreements with Current Executive Officers ”
“ SPECIAL FACTORS — Equity Award Arrangements with Directors and Executive Officers ”
“ SPECIAL FACTORS — Employment Arrangements Following the Merger ”
“ SPECIAL FACTORS — Interests of the Company’s Directors and Executive Officers in the Merger ”
“ SPECIAL FACTORS — Intent of the Company’s Directors and Executive Officers to Vote in Favor of the Merger ”
“ SPECIAL FACTORS — Intent of Certain Stockholders to Vote in Favor of the Merger ”
“ SPECIAL FACTORS — Financing of the Merger ”
“ SPECIAL FACTORS — Fees and Expenses ”
“ THE SPECIAL MEETING — Votes Required ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY — Transactions in Company Shares ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY — Past Contacts, Transactions, Negotiations and Agreements ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY — Prior Public Offerings ”
12
“ WHERE YOU CAN FIND ADDITIONAL INFORMATION ”
“ THE MERGER AGREEMENT ”
“ ROLLOVER AGREEMENTS ”
“ INTERIM INVESTORS AGREEMENT ”
“ Annex A — Agreement and Plan of Merger ”
“ Annex C: Rollover Agreement — Robert A. Ortenzio ”
“ Annex D: Rollover Agreement — Martin F. Jackson ”
“ Annex E: Rollover Agreement — Robert A. Ortenzio Descendants Trust ”
“ Annex F: Rollover Agreement — Rocco A. Ortenzio Revocable Trust, DTD 8-14-2007, As Amended ”
“ Annex G: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Bryan A. Ortenzio ”
“ Annex H: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Kevin M. Ortenzio ”
“ Annex I: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Madeline G. Ortenzio ”
“ Annex J: Interim Investors Agreement ”
Item 6. Purposes of the Transaction and Plans or Proposals
(b) Use of Securities Acquired. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“ SUMMARY TERM SHEET ”
“ QUESTIONS AND ANSWERS ”
“ SPECIAL FACTORS — Reasons for the Merger; Recommendation of the Special Committee and the Company Board ”
“ SPECIAL FACTORS — Purposes and Reasons of the Purchaser Filing Parties ”
“ SPECIAL FACTORS — Plans for the Company After the Merger ”
“ SPECIAL FACTORS — Certain Effects of the Merger ”
“ SPECIAL FACTORS — Certain Effects on the Company if the Merger is Not Completed ”
“ SPECIAL FACTORS — Interests of the Company’s Directors and Executive Officers in the Merger ”
“ SPECIAL FACTORS — Financing of the Merger ”
“ SPECIAL FACTORS — Delisting and Deregistration of Company Shares ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY — Market Price of the Company Shares ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY — Dividends ”
“ IMPORTANT INFORMATION REGARDING THE PURCHASER FILING PARTIES ”
“ THE MERGER AGREEMENT ”
“ Annex A — Agreement and Plan of Merger ”
(c)(1) – (8) Plans . The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
13
“ SUMMARY TERM SHEET ”
“ QUESTIONS AND ANSWERS ”
“ SPECIAL FACTORS — Background of the Merger ”
“ SPECIAL FACTORS — Reasons for the Merger; Recommendation of the Special Committee and the Company Board ”
“ SPECIAL FACTORS — Opinion of the Financial Advisor to the Special Committee ”
“ SPECIAL FACTORS — Purposes and Reasons of the Purchaser Filing Parties ”
“ SPECIAL FACTORS — Position of the WCAS Filing Parties and Parent Entities as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Position of the Rollover Filing Parties as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Plans for the Company After the Merger ”
“ SPECIAL FACTORS — Certain Effects of the Merger ”
“ SPECIAL FACTORS — Certain Effects on the Company if the Merger is Not Completed ”
“ SPECIAL FACTORS — Equity Award Arrangements with Directors and Executive Officers ”
“ SPECIAL FACTORS — Employment Arrangements Following the Merger ”
“ SPECIAL FACTORS — Interests of the Company’s Directors and Executive Officers in the Merger ”
“ SPECIAL FACTORS — Intent of the Company’s Directors and Executive Officers to Vote in Favor of the Merger ”
“ SPECIAL FACTORS — Intent of Certain Stockholders to Vote in Favor of the Merger ”
“ SPECIAL FACTORS — Financing of the Merger ”
“ SPECIAL FACTORS — Delisting and Deregistration of Company Shares ”
“ THE MERGER AGREEMENT ”
“ ROLLOVER AGREEMENTS ”
“ THE SPECIAL MEETING ”
“ Annex A — Agreement and Plan of Merger ”
“ Annex B — Opinion of Goldman Sachs & Co. LLC ”
“ Annex C: Rollover Agreement — Robert A. Ortenzio ”
“ Annex D: Rollover Agreement — Martin F. Jackson ”
“ Annex E: Rollover Agreement — Robert A. Ortenzio Descendants Trust ”
“ Annex F: Rollover Agreement — Rocco A. Ortenzio Revocable Trust, DTD 8-14-2007, As Amended ”
“ Annex G: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Bryan A. Ortenzio ”
“ Annex H: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Kevin M. Ortenzio ”
“ Annex I: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Madeline G. Ortenzio ”
Item 7. Purposes, Alternatives, Reasons and Effects
(a) Purposes. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
14
“ SUMMARY TERM SHEET ”
“ QUESTIONS AND ANSWERS ”
“ SPECIAL FACTORS — Background of the Merger ”
“ SPECIAL FACTORS — Reasons for the Merger; Recommendation of the Special Committee and the Company Board ”
“ SPECIAL FACTORS — Purposes and Reasons of the Purchaser Filing Parties ”
“ SPECIAL FACTORS — Position of the WCAS Filing Parties and Parent Entities as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Position of the Rollover Filing Parties as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Plans for the Company After the Merger ”
“ SPECIAL FACTORS — Certain Effects of the Merger ”
“ SPECIAL FACTORS — Certain Effects on the Company if the Merger is Not Completed ”
(b) Alternatives. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“ SUMMARY TERM SHEET ”
“ SPECIAL FACTORS — Background of the Merger ”
“ SPECIAL FACTORS — Reasons for the Merger; Recommendation of the Special Committee and the Company Board ”
“ SPECIAL FACTORS — Purposes and Reasons of the Purchaser Filing Parties ”
“ SPECIAL FACTORS — Opinion of the Financial Advisor to the Special Committee ”
“ SPECIAL FACTORS — Materials Provided to the Special Committee by Goldman Sachs ”
“ SPECIAL FACTORS — Materials Provided to the Purchaser Filing Parties by Wells Fargo and JPMorgan ”
“ SPECIAL FACTORS — Position of the WCAS Filing Parties and Parent Entities as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Position of the Rollover Filing Parties as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Certain Effects on the Company if the Merger is Not Completed ”
(c) Reasons. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“ SUMMARY TERM SHEET ”
“ QUESTIONS AND ANSWERS ”
“ SPECIAL FACTORS — Background of the Merger ”
“ SPECIAL FACTORS — Opinion of the Financial Advisor to the Special Committee ”
“ SPECIAL FACTORS — Materials Provided to the Special Committee by Goldman Sachs ”
“ SPECIAL FACTORS — Materials Provided to the Purchaser Filing Parties by Wells Fargo and JPMorgan ”
“ SPECIAL FACTORS — Unaudited Prospective Financial Information ”
15
“ SPECIAL FACTORS — Reasons for the Merger; Recommendation of the Special Committee and the Company Board ”
“ SPECIAL FACTORS — Purposes and Reasons of the Purchaser Filing Parties ”
“ SPECIAL FACTORS — Position of the WCAS Filing Parties and Parent Entities as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Position of the Rollover Filing Parties as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Plans for the Company After the Merger ”
“ SPECIAL FACTORS — Certain Effects of the Merger ”
“ SPECIAL FACTORS — Certain Effects on the Company if the Merger is Not Completed ”
“ Annex B — Opinion of Goldman Sachs & Co. LLC ”
(d) Effects. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“ SUMMARY TERM SHEET ”
“ QUESTIONS AND ANSWERS ”
“ SPECIAL FACTORS — Background of the Merger ”
“ SPECIAL FACTORS — Reasons for the Merger; Recommendation of the Special Committee and the Company Board ”
“ SPECIAL FACTORS — Opinion of the Financial Advisor to the Special Committee ”
“ SPECIAL FACTORS — Certain Effects of the Merger ”
“ SPECIAL FACTORS — Certain Effects on the Company if the Merger is Not Completed ”
“ SPECIAL FACTORS — Purposes and Reasons of the Purchaser Filing Parties ”
“ SPECIAL FACTORS — Position of the WCAS Filing Parties and Parent Entities as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Position of the Rollover Filing Parties as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Plans for the Company After the Merger ”
“ SPECIAL FACTORS — Financing of the Merger ”
“ SPECIAL FACTORS — Fees and Expenses ”
“ SPECIAL FACTORS — Interests of the Company’s Directors and Executive Officers in the Merger ”
“ SPECIAL FACTORS — Intent of the Company’s Directors and Executive Officers to Vote in Favor of the Merger ”
“ SPECIAL FACTORS — Intent of Certain Stockholders to Vote in Favor of the Merger ”
“ SPECIAL FACTORS — Employment Agreements and Change in Control Agreements with Current Executive Officers ”
“ SPECIAL FACTORS — Equity Award Arrangements with Directors and Executive Officers ”
“ SPECIAL FACTORS — Employment Arrangements Following the Merger ”
“ SPECIAL FACTORS — U.S. Federal Income Tax Considerations of the Merger ”
16
“ SPECIAL FACTORS — Accounting Treatment ”
“ SPECIAL FACTORS — Litigation Relating to the Merger ”
“ SPECIAL FACTORS — Delisting and Deregistration of Company Shares ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY — Market Price of the Company Shares ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY — Dividends ”
“ IMPORTANT INFORMATION REGARDING THE PURCHASER FILING PARTIES ”
“ APPRAISAL RIGHTS ”
“ THE MERGER AGREEMENT — Effect of the Merger ”
“ THE MERGER AGREEMENT — Directors and Officers; Certificate of Incorporation; Bylaws ”
“ THE MERGER AGREEMENT — Merger Consideration ”
“ THE MERGER AGREEMENT — Employee Benefit Matters ”
“ THE MERGER AGREEMENT — Exchange and Payment Procedures ”
“ THE MERGER AGREEMENT — Indemnification and Insurance ”
“ THE MERGER AGREEMENT — Fees and Expenses ”
“ WHERE YOU CAN FIND ADDITIONAL INFORMATION ”
“ PROPOSAL 1: THE MERGER PROPOSAL ”
“ PROPOSAL 2: THE COMPENSATION PROPOSAL ”
“ ROLLOVER AGREEMENTS ”
“ Annex A — Agreement and Plan of Merger ”
“ Annex B — Opinion of Goldman Sachs & Co. LLC ”
“ Annex C: Rollover Agreement — Robert A. Ortenzio ”
“ Annex D: Rollover Agreement — Martin F. Jackson ”
“ Annex E: Rollover Agreement — Robert A. Ortenzio Descendants Trust ”
“ Annex F: Rollover Agreement — Rocco A. Ortenzio Revocable Trust, DTD 8-14-2007, As Amended ”
“ Annex G: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Bryan A. Ortenzio ”
“ Annex H: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Kevin M. Ortenzio ”
“ Annex I: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Madeline G. Ortenzio ”
Item 8. Fairness of the Transaction
(a) – (b) Fairness; Factors Considered in Determining Fairness. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“ SUMMARY TERM SHEET ”
“ QUESTIONS AND ANSWERS ”
“ SPECIAL FACTORS — Background of the Merger ”
17
“ SPECIAL FACTORS — Reasons for the Merger; Recommendation of the Special Committee and the Company Board ”
“ SPECIAL FACTORS — Purposes and Reasons of the Purchaser Filing Parties ”
“ SPECIAL FACTORS — Position of the WCAS Filing Parties and Parent Entities as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Position of the Rollover Filing Parties as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Plans for the Company After the Merger ”
“ SPECIAL FACTORS — Certain Effects of the Merger ”
“ SPECIAL FACTORS — Certain Effects on the Company if the Merger is Not Completed ”
“ SPECIAL FACTORS — Employment Agreements and Change in Control Agreements with Current Executive Officers ”
“ SPECIAL FACTORS — Equity Award Arrangements with Directors and Executive Officers ”
“ SPECIAL FACTORS — Employment Arrangements Following the Merger ”
“ SPECIAL FACTORS — Opinion of the Financial Advisor to the Special Committee ”
“ SPECIAL FACTORS — Materials Provided to the Special Committee by Goldman Sachs ”
“ SPECIAL FACTORS — Materials Provided to the Purchaser Filing Parties by Wells Fargo and JPMorgan ”
“ SPECIAL FACTORS — Interests of the Company’s Directors and Executive Officers in the Merger ”
“ THE MERGER AGREEMENT — Indemnification and Insurance ”
“ Annex B — Opinion of Goldman Sachs & Co. LLC ”
The discussion materials prepared by Goldman Sachs & Co. LLC (“ Goldman Sachs ”) and provided to the Special Committee, dated December 23, 2025, January 12, 2026, January 29, 2026, February 6, 2026, February 8, 2026, February 10, 2026, February 23, 2026, February 25, 2026, February 28, 2026, March 2, 2026 and March 11, 2026, are attached hereto as Exhibit (c)(iv) through and including Exhibit (c)(xiv) and are each incorporated by reference herein.
The discussion materials prepared by Wells Fargo Securities, LLC (“ Wells Fargo ”) and J.P. Morgan Securities LLC (“ JPMorgan ”) and provided to the Purchaser Filing Parties, dated November 2025 and March 1, 2026, are attached hereto as Exhibits (c)(ii)-(c)(iii) and are each incorporated by reference herein.
(c) Approval of Security Holders. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“ SUMMARY TERM SHEET ”
“ QUESTIONS AND ANSWERS ”
“ SPECIAL FACTORS — Background of the Merger ”
“ SPECIAL FACTORS — Reasons for the Merger; Recommendation of the Special Committee and the Company Board ”
“ SPECIAL FACTORS — Purposes and Reasons of the Purchaser Filing Parties ”
“ SPECIAL FACTORS — Position of the WCAS Filing Parties and Parent Entities as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Position of the Rollover Filing Parties as to the Fairness of the Merger ”
18
“ THE MERGER AGREEMENT — Conditions to the Closing of the Merger ”
“ THE SPECIAL MEETING — Record Date; Shares Entitled to Vote; Quorum ”
“ THE SPECIAL MEETING — Votes Required ”
“ THE SPECIAL MEETING — Voting of Proxies ”
“ THE SPECIAL MEETING — Abstentions ”
“ THE SPECIAL MEETING — Broker Non-Votes ”
“ THE SPECIAL MEETING — Revocability of Proxies ”
“ THE SPECIAL MEETING — Adjournment ”
“ THE SPECIAL MEETING — Solicitation of Proxies ”
“ THE SPECIAL MEETING — Appraisal Rights ”
“ APPRAISAL RIGHTS ”
“ ROLLOVER AGREEMENTS ”
“ STOCKHOLDER PROPOSALS AND NOMINATIONS ”
“ PROPOSAL 1: THE MERGER PROPOSAL ”
“ Annex A — Agreement and Plan of Merger ”
“ Annex C: Rollover Agreement — Robert A. Ortenzio ”
“ Annex D: Rollover Agreement — Martin F. Jackson ”
“ Annex E: Rollover Agreement — Robert A. Ortenzio Descendants Trust ”
“ Annex F: Rollover Agreement — Rocco A. Ortenzio Revocable Trust, DTD 8-14-2007, As Amended ”
“ Annex G: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Bryan A. Ortenzio ”
“ Annex H: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Kevin M. Ortenzio ”
“ Annex I: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Madeline G. Ortenzio ”
(d) Unaffiliated Representative. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“ SUMMARY TERM SHEET ”
“ SPECIAL FACTORS — Background of the Merger ”
“ SPECIAL FACTORS — Reasons for the Merger; Recommendation of the Special Committee and the Company Board ”
“ SPECIAL FACTORS — Purposes and Reasons of the Purchaser Filing Parties ”
“ SPECIAL FACTORS — Position of the WCAS Filing Parties and Parent Entities as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Position of the Rollover Filing Parties as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Opinion of the Financial Advisor to the Special Committee ”
“ PROVISIONS FOR UNAFFILIATED COMPANY STOCKHOLDERS ”
“ Annex B — Opinion of Goldman Sachs & Co. LLC ”
19
(e) Approval of Directors. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“ SUMMARY TERM SHEET ”
“ QUESTIONS AND ANSWERS ”
“ SPECIAL FACTORS — Background of the Merger ”
“ SPECIAL FACTORS — Reasons for the Merger; Recommendation of the Special Committee and the Company Board ”
“ SPECIAL FACTORS — Purposes and Reasons of the Purchaser Filing Parties ”
“ SPECIAL FACTORS — Position of the WCAS Filing Parties and Parent Entities as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Position of the Rollover Filing Parties as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Interests of the Company’s Directors and Executive Officers in the Merger ”
“ SPECIAL FACTORS — Intent of the Company’s Directors and Executive Officers to Vote in Favor of the Merger ”
“ SPECIAL FACTORS — Intent of Certain Stockholders to Vote in Favor of the Merger ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY ”
“ IMPORTANT INFORMATION REGARDING THE PURCHASER FILING PARTIES ”
(f) Other Offers. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“ SPECIAL FACTORS — Background of the Merger ”
“ SPECIAL FACTORS — Reasons for the Merger; Recommendation of the Special Committee and the Company Board ”
“ SPECIAL FACTORS — Purposes and Reasons of the Purchaser Filing Parties ”
“ SPECIAL FACTORS — Position of the WCAS Filing Parties and Parent Entities as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Position of the Rollover Filing Parties as to the Fairness of the Merger ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY ”
“ THE MERGER AGREEMENT — Solicitation of Other Offers ”
“ THE MERGER AGREEMENT — Company Recommendation Changes ”
“ Annex A — Agreement and Plan of Merger ”
Item 9. Reports, Opinions, Appraisals and Negotiations
(a) – (c) Report, Opinion or Appraisal; Preparer and Summary of the Report, Opinion or Appraisal; Availability of Documents . The information set forth in the Proxy Statement under the following captions is incorporated herein by reference.
“ SUMMARY TERM SHEET ”
“ QUESTIONS AND ANSWERS ”
“ SPECIAL FACTORS — Background of the Merger ”
20
“ SPECIAL FACTORS — Reasons for the Merger; Recommendation of the Special Committee and the Company Board ”
“ SPECIAL FACTORS — Purposes and Reasons of the Purchaser Filing Parties ”
“ SPECIAL FACTORS — Position of the WCAS Filing Parties and Parent Entities as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Position of the Rollover Filing Parties as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Opinion of the Financial Advisor to the Special Committee ”
“ SPECIAL FACTORS — Materials Provided to the Special Committee by Goldman Sachs ”
“ SPECIAL FACTORS — Materials Provided to the Purchaser Filing Parties by Wells Fargo and JPMorgan ”
“ SPECIAL FACTORS — Unaudited Prospective Financial Information ”
“ WHERE YOU CAN FIND ADDITIONAL INFORMATION ”
“ Annex B — Opinion of Goldman Sachs & Co. LLC ”
The discussion materials prepared by Goldman Sachs and provided to the Special Committee, dated December 23, 2025, January 12, 2026, January 29, 2026, February 6, 2026, February 8, 2026, February 10, 2026, February 23, 2026, February 25, 2026, February 28, 2026, March 2, 2026 and March 11, 2026, are attached hereto as Exhibit (c)(iv) through and including Exhibit (c)(xiv) and are each incorporated by reference herein.
The discussion materials prepared by Wells Fargo and JPMorgan and provided to the Purchaser Filing Parties, dated November 2025 and March 1, 2026, are attached hereto as Exhibits (c)(ii)-(c)(iii) and are each incorporated by reference herein.
The reports, opinions or appraisals referenced in this Item 9 are filed herewith or incorporated by reference herein and will be made available for inspection and copying at the principal executive offices of the Company during its regular business hours by any interested holder of Company Shares or representative who has been designated in writing, and copies may be obtained by requesting them in writing from the Company at the email address provided under the caption “ Where You Can Find Additional Information ” in the Proxy Statement, which is incorporated herein by reference.
Item 10. Source and Amount of Funds or Other Consideration
(a) – (b) Source of Funds; Conditions. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“ SUMMARY TERM SHEET ”
“ SPECIAL FACTORS — Reasons for the Merger; Recommendation of the Special Committee and the Company Board ”
“ SPECIAL FACTORS — Financing of the Merger ”
“ SPECIAL FACTORS — Interests of the Company’s Directors and Executive Officers in the Merger ”
“ SPECIAL FACTORS — Equity Award Arrangements with Directors and Executive Officers ”
“ SPECIAL FACTORS — Fees and Expenses ”
“ THE MERGER AGREEMENT ”
“ Annex A — Agreement and Plan of Merger ”
The Equity Commitment Letter, the Limited Guaranty and the Amended and Restated Debt Commitment Letter are each attached as Exhibits (d)(x)-(xii) and incorporated herein by reference.
21
(c) Expenses. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“ SPECIAL FACTORS — Fees and Expenses ”
“ SPECIAL FACTORS — Certain Effects of the Merger ”
“ SPECIAL FACTORS — Certain Effects on the Company if the Merger is Not Completed ”
“ THE SPECIAL MEETING — Solicitation of Proxies ”
“ THE MERGER AGREEMENT ”
“ THE MERGER AGREEMENT — Termination of the Merger Agreement ”
“ THE MERGER AGREEMENT — Parent Termination Fee ”
“ THE MERGER AGREEMENT — Company Termination Fee ”
“ THE MERGER AGREEMENT — Indemnification and Insurance ”
“ THE MERGER AGREEMENT — Other Covenants ”
“ THE MERGER AGREEMENT — Fees and Expenses ”
“ THE MERGER AGREEMENT — Limitations of Liability ”
“ Annex A — Agreement and Plan of Merger ”
(d) Borrowed Funds .
“ SUMMARY TERM SHEET ”
“ SPECIAL FACTORS — Financing of the Merger ”
“ THE MERGER AGREEMENT ”
“ Annex A — Agreement and Plan of Merger ”
Item 11. Interest in Securities of the Subject Company
(a) Securities Ownership. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“ SUMMARY TERM SHEET ”
“ QUESTIONS AND ANSWERS ”
“ SPECIAL FACTORS — Interests of the Company’s Directors and Executive Officers in the Merger ”
“ SPECIAL FACTORS — Employment Agreements and Change in Control Agreements with Current Executive Officers ”
“ SPECIAL FACTORS — Equity Award Arrangements with Directors and Executive Officers ”
“ SPECIAL FACTORS — Employment Arrangements Following the Merger ”
“ SPECIAL FACTORS — Intent of the Company’s Directors and Executive Officers to Vote in Favor of the Merger ”
“ SPECIAL FACTORS — Intent of Certain Stockholders to Vote in Favor of the Merger ”
“ THE SPECIAL MEETING — Record Date; Shares Entitled to Vote; Quorum ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY — Security Ownership of Certain Beneficial Owners and Management ”
22
“ IMPORTANT INFORMATION REGARDING THE COMPANY — Transactions in Company Shares ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY — Past Contacts, Transactions, Negotiations and Agreements ”
“ IMPORTANT INFORMATION REGARDING THE PURCHASER FILING PARTIES ”
“ ROLLOVER AGREEMENTS ”
“ Annex C: Rollover Agreement — Robert A. Ortenzio ”
“ Annex D: Rollover Agreement — Martin F. Jackson ”
“ Annex E: Rollover Agreement — Robert A. Ortenzio Descendants Trust ”
“ Annex F: Rollover Agreement — Rocco A. Ortenzio Revocable Trust, DTD 8-14-2007, As Amended ”
“ Annex G: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Bryan A. Ortenzio ”
“ Annex H: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Kevin M. Ortenzio ”
“ Annex I: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Madeline G. Ortenzio ”
(b) Securities Transactions. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“ SPECIAL FACTORS — Background of the Merger ”
“ SPECIAL FACTORS — Interests of the Company’s Directors and Executive Officers in the Merger ”
“ SPECIAL FACTORS — Equity Award Arrangements with Directors and Executive Officers ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY — Transactions in Company Shares ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY — Past Contacts, Transactions, Negotiations and Agreements ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY — Prior Public Offerings ”
“ THE MERGER AGREEMENT ”
“ ROLLOVER AGREEMENTS ”
“ Annex A — Agreement and Plan of Merger ”
“ Annex C: Rollover Agreement — Robert A. Ortenzio ”
“ Annex D: Rollover Agreement — Martin F. Jackson ”
“ Annex E: Rollover Agreement — Robert A. Ortenzio Descendants Trust ”
“ Annex F: Rollover Agreement — Rocco A. Ortenzio Revocable Trust, DTD 8-14-2007, As Amended ”
“ Annex G: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Bryan A. Ortenzio ”
“ Annex H: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Kevin M. Ortenzio ”
“ Annex I: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Madeline G. Ortenzio ”
Item 12. The Solicitation or Recommendation
(d) Intent to Tender or Vote in a Going-Private Transaction. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
23
“ SUMMARY TERM SHEET ”
“ QUESTIONS AND ANSWERS ”
“ SPECIAL FACTORS — Background of the Merger ”
“ SPECIAL FACTORS — Reasons for the Merger; Recommendation of the Special Committee and the Company Board ”
“ SPECIAL FACTORS — Purposes and Reasons of the Purchaser Filing Parties ”
“ SPECIAL FACTORS — Position of the WCAS Filing Parties and Parent Entities as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Position of the Rollover Filing Parties as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Interests of the Company’s Directors and Executive Officers in the Merger ”
“ SPECIAL FACTORS — Intent of the Company’s Directors and Executive Officers to Vote in Favor of the Merger ”
“ SPECIAL FACTORS — Intent of Certain Stockholders to Vote in Favor of the Merger ”
“ THE SPECIAL MEETING — Record Date; Shares Entitled to Vote; Quorum ”
“ THE SPECIAL MEETING — Shares Held by the Company’s Directors and Executive Officers ”
“ THE SPECIAL MEETING — Votes Required ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY — Security Ownership of Certain Beneficial Owners and Management ”
“ ROLLOVER AGREEMENTS ”
“ Annex C: Rollover Agreement — Robert A. Ortenzio ”
“ Annex D: Rollover Agreement — Martin F. Jackson ”
“ Annex E: Rollover Agreement — Robert A. Ortenzio Descendants Trust ”
“ Annex F: Rollover Agreement — Rocco A. Ortenzio Revocable Trust, DTD 8-14-2007, As Amended ”
“ Annex G: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Bryan A. Ortenzio ”
“ Annex H: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Kevin M. Ortenzio ”
“ Annex I: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Madeline G. Ortenzio ”
(e) Recommendation of Others. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“ SUMMARY TERM SHEET ”
“ QUESTIONS AND ANSWERS ”
“ SPECIAL FACTORS — Background of the Merger ”
“ SPECIAL FACTORS — Reasons for the Merger; Recommendation of the Special Committee and the Company Board ”
“ SPECIAL FACTORS — Interests of the Company’s Directors and Executive Officers in the Merger ”
“ SPECIAL FACTORS — Purposes and Reasons of the Purchaser Filing Parties ”
“ SPECIAL FACTORS — Position of the WCAS Filing Parties and Parent Entities as to the Fairness of the Merger ”
24
“ SPECIAL FACTORS — Position of the Rollover Filing Parties as to the Fairness of the Merger ”
“ THE SPECIAL MEETING — Shares Held by the Company’s Directors and Executive Officers ”
“ PROPOSAL 1: THE MERGER PROPOSAL ”
“ ROLLOVER AGREEMENTS ”
“ Annex C: Rollover Agreement — Robert A. Ortenzio ”
“ Annex D: Rollover Agreement — Martin F. Jackson ”
“ Annex E: Rollover Agreement — Robert A. Ortenzio Descendants Trust ”
“ Annex F: Rollover Agreement — Rocco A. Ortenzio Revocable Trust, DTD 8-14-2007, As Amended ”
“ Annex G: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Bryan A. Ortenzio ”
“ Annex H: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Kevin M. Ortenzio ”
“ Annex I: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Madeline G. Ortenzio ”
Item 13. Financial Statements
(a) Financial Information. The audited financial statements set forth in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2025, filed on February 19, 2026 , including the portions of the Company’s Definitive Proxy Statement on Schedule 14A for the April 23, 2026 annual meeting of stockholders, filed on March 4, 2026 , are incorporated herein by reference. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“ SUMMARY TERM SHEET ”
“ SPECIAL FACTORS — Unaudited Prospective Financial Information ”
“ SPECIAL FACTORS — Opinion of the Financial Advisor to the Special Committee ”
“ SPECIAL FACTORS — Materials Provided to the Special Committee by Goldman Sachs ”
“ SPECIAL FACTORS — Materials Provided to the Purchaser Filing Parties by Wells Fargo and JPMorgan ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY — Selected Historical Consolidated Financial Data ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY — Book Value per Share ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY — Market Price of the Company Shares ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY — Dividends ”
“ WHERE YOU CAN FIND ADDITIONAL INFORMATION ”
(b) Pro Forma Information . Not Applicable.
Item 14. Persons/Assets, Retained, Employed, Compensated or Used
(a) – (b) Solicitations or Recommendations; Employees and Corporate Assets. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“ SUMMARY TERM SHEET ”
“ QUESTIONS AND ANSWERS ”
25
“ THE SPECIAL MEETING ”
“ SPECIAL FACTORS — Background of the Merger ”
“ SPECIAL FACTORS — Reasons for the Merger; Recommendation of the Special Committee and the Company Board ”
“ SPECIAL FACTORS — Purposes and Reasons of the Purchaser Filing Parties ”
“ SPECIAL FACTORS — Position of the WCAS Filing Parties and Parent Entities as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Position of the Rollover Filing Parties as to the Fairness of the Merger ”
“ SPECIAL FACTORS — Interests of the Company’s Directors and Executive Officers in the Merger ”
“ SPECIAL FACTORS — Intent of the Company’s Directors and Executive Officers to Vote in Favor of the Merger ”
“ SPECIAL FACTORS — Intent of Certain Stockholders to Vote in Favor of the Merger ”
“ SPECIAL FACTORS — Fees and Expenses ”
“ THE MERGER AGREEMENT — Fees and Expenses ”
“ IMPORTANT INFORMATION REGARDING THE COMPANY ”
“ IMPORTANT INFORMATION REGARDING THE PURCHASER FILING PARTIES ”
“ ROLLOVER AGREEMENTS ”
“ Annex C: Rollover Agreement — Robert A. Ortenzio ”
“ Annex D: Rollover Agreement — Martin F. Jackson ”
“ Annex E: Rollover Agreement — Robert A. Ortenzio Descendants Trust ”
“ Annex F: Rollover Agreement — Rocco A. Ortenzio Revocable Trust, DTD 8-14-2007, As Amended ”
“ Annex G: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Bryan A. Ortenzio ”
“ Annex H: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Kevin M. Ortenzio ”
“ Annex I: Rollover Agreement — Robert A. Ortenzio April 2014 Trust for Madeline G. Ortenzio ”
Item 15. Additional Information
(b) The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“ SUMMARY TERM SHEET ”
“ SPECIAL FACTORS — Interests of the Company’s Directors and Executive Officers in the Merger ”
“ SPECIAL FACTORS — Certain Effects of the Merger ”
“ SPECIAL FACTORS — Equity Award Arrangements with Directors and Executive Officers ”
“ THE MERGER AGREEMENT — Merger Consideration ”
“ THE MERGER AGREEMENT — Employee Benefit Matters ”
“ PROPOSAL 2: THE COMPENSATION PROPOSAL ”
“ Annex A — Agreement and Plan of Merger ”
26
(c) Other Material Information. The entirety of the Proxy Statement, including all appendices thereto, is incorporated herein by reference.
Item 16. Exhibits
The following exhibits are filed herewith:
Exhibit No.
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Description
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(a)(2)(i)
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Preliminary Proxy Statement of Select Medical Holdings Corporation (included in the Schedule 14A filed on April 15, 2026, and incorporated herein by reference) (the “Preliminary Proxy Statement”).
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(a)(2)(ii)*
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Form of Proxy Card.
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(a)(2)(iii)
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Letter to Stockholders (included in the Preliminary Proxy Statement and incorporated herein by reference).
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(a)(2)(iv)
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Notice of Special Meeting of Stockholders (included in the Preliminary Proxy Statement and incorporated herein by reference).
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(a)(5)(i)
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Press Release, dated March 2, 2026 (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed by Select Medical Holdings Corporation with the SEC on March 3, 2026).
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(c)(i)
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Opinion of Goldman Sachs & Co. LLC, dated as of March 2, 2026 (included as Appendix B to the Preliminary Proxy Statement and incorporated herein by reference).
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(c)(ii)
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Discussion materials prepared by Wells Fargo Securities, LLC and JPMorgan Securities LLC, dated March 1, 2026, for the Buyer Consortium.
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(c)(iii)
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Discussion materials prepared by Wells Fargo Securities, LLC and JPMorgan Securities LLC, dated November 2025, for the Buyer Consortium.
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(c)(iv)
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Discussion materials prepared by Goldman Sachs & Co. LLC, dated December 23, 2025, for the Special Committee of the Board of Directors of Select Medical Holdings Corporation.
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(c)(v)
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Discussion materials prepared by Goldman Sachs & Co. LLC, dated January 12, 2026, for the Special Committee of the Board of Directors of Select Medical Holdings Corporation.
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(c)(vi)
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Discussion materials prepared by Goldman Sachs & Co. LLC, dated January 29, 2026, for the Special Committee of the Board of Directors of Select Medical Holdings Corporation.
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(c)(vii)
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Discussion materials prepared by Goldman Sachs & Co. LLC, dated February 6, 2026, for the Special Committee of the Board of Directors of Select Medical Holdings Corporation.
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(c)(viii)
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Discussion materials prepared by Goldman Sachs & Co. LLC, dated February 8, 2026, for the Special Committee of the Board of Directors of Select Medical Holdings Corporation.
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(c)(ix)
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Discussion materials prepared by Goldman Sachs & Co. LLC, dated February 10, 2026, for the Special Committee of the Board of Directors of Select Medical Holdings Corporation.
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(c)(x)
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Discussion materials prepared by Goldman Sachs & Co. LLC, dated February 23, 2026, for the Special Committee of the Board of Directors of Select Medical Holdings Corporation.
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(c)(xi)
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Discussion materials prepared by Goldman Sachs & Co. LLC, dated February 25, 2026, for the Special Committee of the Board of Directors of Select Medical Holdings Corporation.
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(c)(xii)
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Discussion materials prepared by Goldman Sachs & Co. LLC, dated February 28, 2026, for the Special Committee of the Board of Directors of Select Medical Holdings Corporation.
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(c)(xiii)
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Discussion materials prepared by Goldman Sachs & Co. LLC, dated March 2, 2026, for the Special Committee of the Board of Directors of Select Medical Holdings Corporation.
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(c)(xiv)
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Discussion materials prepared by Goldman Sachs & Co. LLC, dated March 11, 2026, for the Special Committee of the Board of Directors of Select Medical Holdings Corporation.
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(d)(i)
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Agreement and Plan of Merger, dated March 2, 2026, by and between Select Medical Holdings Corporation, Stallion Intermediate Corporation and Stallion MergerSub Corporation (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by Select Medical Holdings Corporation with the SEC on March 3, 2026).
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27
Exhibit No.
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Description
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(d)(ii)
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Rollover Agreement, dated March 2, 2026, by and between Stallion Intermediate Corporation and Robert A. Ortenzio (incorporated by reference to Exhibit 99.5 to the Schedule 13D/A filed by Mr. Ortenzio, Mr. Jackson and the Estate of Rocco A. Ortenzio with the SEC on March 4, 2026).
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(d)(iii)
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Rollover Agreement, dated March 2, 2026, by and between Stallion Intermediate Corporation and Martin F. Jackson (incorporated by reference to Exhibit 99.6 to the Schedule 13D/A filed by Mr. Ortenzio, Mr. Jackson and the Estate of Rocco A. Ortenzio with the SEC on March 4, 2026).
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(d)(iv)
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Rollover Agreement, dated March 2, 2026, by and between Stallion Intermediate Corporation and the Robert A. Ortenzio April 2014 Trust for Bryan A. Ortenzio (incorporated by reference to Exhibit 99.7 to the Schedule 13D/A filed by Mr. Ortenzio, Mr. Jackson and the Estate of Rocco A. Ortenzio with the SEC on March 4, 2026).
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(d)(v)
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Rollover Agreement, dated March 2, 2026, by and between Stallion Intermediate Corporation and the Robert A. Ortenzio April 2014 Trust for Kevin M. Ortenzio (incorporated by reference to Exhibit 99.8 to the Schedule 13D/A filed by Mr. Ortenzio, Mr. Jackson and the Estate of Rocco A. Ortenzio with the SEC on March 4, 2026).
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(d)(vi)
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Rollover Agreement, dated March 2, 2026, by and between Stallion Intermediate Corporation and the Robert A. Ortenzio April 2014 Trust for Madeline G. Ortenzio (incorporated by reference to Exhibit 99.9 to the Schedule 13D/A filed by Mr. Ortenzio, Mr. Jackson and the Estate of Rocco A. Ortenzio with the SEC on March 4, 2026).
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(d)(vii)
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Rollover Agreement, dated March 2, 2026, by and between Stallion Intermediate Corporation and the Robert A. Ortenzio Descendants Trust (incorporated by reference to Exhibit 99.10 to the Schedule 13D/A filed by Mr. Ortenzio, Mr. Jackson and the Estate of Rocco A. Ortenzio with the SEC on March 4, 2026).
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(d)(viii)
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Rollover Agreement, dated March 2, 2026, by and between Stallion Intermediate Corporation and the Rocco A. Ortenzio Revocable Trust, DTD 8-14-2007, As Amended (incorporated by reference to Exhibit 99.11 to the Schedule 13D/A filed by Mr. Ortenzio, Mr. Jackson and the Estate of Rocco A. Ortenzio with the SEC on March 4, 2026).
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(d)(ix)
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Interim Investors Agreement, dated March 2, 2026, by and between Stallion Intermediate Corporation, Stallion MergerSub Corporation, Robert A Ortenzio and Martin F. Jackson (incorporated by reference to Exhibit 99.12 to the Schedule 13D/A filed by Mr. Ortenzio, Mr. Jackson and the Estate of Rocco A. Ortenzio with the SEC on March 4, 2026).
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(d)(x)
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Equity Commitment Letter, dated March 2, 2026, by and between WCAS XIV, L.P. and Stallion Intermediate Corporation.
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(d)(xi)
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Limited Guaranty, dated March 2, 2026, by and between WCAS XIV, L.P. and Stallion Intermediate Corporation.
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(d)(xii)
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Amended and Restated Debt Commitment Letter, dated March 14, 2026, by and among JPMorgan Chase Bank, N.A., Wells Fargo Bank, National Association, Wells Fargo Securities, LLC, Bank of America, N.A., BofA Securities, Inc., Deutsche Bank AG New York Branch, Deutsche Bank Securities Inc., Truist Bank, Truist Securities, Inc., Royal Bank of Canada, The Bank of Nova Scotia, Mizuho Bank, Ltd., Capital One, National Association, PNC Bank, National Association, PNC Capital Markets LLC, Fifth Third Bank, National Association and Stallion Intermediate Corporation.
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(f)
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Section 262 of the DGCL.
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(g)
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Not Applicable.
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107
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Filing Fee Table.
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*
To be filed with the Definitive Proxy Statement.
28
SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
SELECT MEDICAL HOLDINGS CORPORATION
By:
/s/ John F. Duggan
Name:
John F. Duggan
Title:
Executive Vice President, General Counsel and Secretary
Date: April 15, 2026
[ Signature Page to Schedule 13E-3 ]
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
STALLION INTERMEDIATE CORPORATION
By:
/s/ Ting Gu
Name:
Ting Gu
Title:
Vice President and Secretary
Date: April 15, 2026
[ Signature Page to Schedule 13E-3 ]
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
STALLION MERGERSUB CORPORATION
By:
/s/ Ting Gu
Name:
Ting Gu
Title:
Vice President and Secretary
Date: April 15, 2026
[ Signature Page to Schedule 13E-3 ]
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
STALLION GROUP PARENT, LP
By:
Stallion Group Parent GP, LLC, its general partner
By:
/s/ Ting Gu
Name:
Ting Gu
Title:
Vice President and Secretary
Date: April 15, 2026
[ Signature Page to Schedule 13E-3 ]
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
STALLION GROUP PARENT GP, LLC
By: WCAS XIV, L.P., its sole member
By: WCAS XIV Associates LLC, its general partner
By:
/s/ Jennifer Martin
Name:
Jennifer Martin
Title:
Managing Member
Date: April 15, 2026
[ Signature Page to Schedule 13E-3 ]
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
WCAS XIV, L.P.
By: WCAS XIV Associates LLC, its general partner
By:
/s/ Jennifer Martin
Name:
Jennifer Martin
Title:
Managing Member
Date: April 15, 2026
[ Signature Page to Schedule 13E-3 ]
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
WCAS XIV ASSOCIATES LLC
By:
/s/ Jennifer Martin
Name:
Jennifer Martin
Title:
Managing Member
Date: April 15, 2026
[ Signature Page to Schedule 13E-3 ]
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
WCAS MANAGEMENT, L.P.
By:
WCAS MANAGEMENT, LLC, its general partner
By:
/s/ Jennifer Martin
Name:
Jennifer Martin
Title:
Treasurer
Date: April 15, 2026
[ Signature Page to Schedule 13E-3 ]
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
WCAS MANAGEMENT, LLC
By:
/s/ Jennifer Martin
Name:
Jennifer Martin
Title:
Treasurer
Date: April 15, 2026
[ Signature Page to Schedule 13E-3 ]
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
ROBERT A. ORTENZIO
/s/ Robert A. Ortenzio
Date: April 15, 2026
[ Signature Page to Schedule 13E-3 ]
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
MARTIN F. JACKSON
/s/ Martin F. Jackson
Date: April 15, 2026
[ Signature Page to Schedule 13E-3 ]
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
ROBERT A. ORTENZIO DESCENDANTS TRUST
By:
/s/ Robert Nause
Name:
Select Asset Management & Truste, Robert Nause, Secretary & Treasurer
Title:
Trustee
Date: April 15, 2026
[ Signature Page to Schedule 13E-3 ]
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
ROCCO A. ORTENZIO REVOCABLE TRUST, DTD 8-14-2007, AS AMENDED
By:
/s/ Robert A. Ortenzio
Name:
Robert A. Ortenzio
Title:
Trustee
Date: April 15, 2026
[ Signature Page to Schedule 13E-3 ]
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
ROBERT A. ORTENZIO APRIL 2014 TRUST FOR BRYAN A. ORTENZIO
By:
/s/ Robert Nause
Name:
Select Asset Management & Truste, Robert Nause, Secretary & Treasurer
Title:
Trustee
Date: April 15, 2026
[ Signature Page to Schedule 13E-3 ]
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
ROBERT A. ORTENZIO APRIL 2014 TRUST FOR KEVIN M. ORTENZIO
By:
/s/ Robert Nause
Name:
Select Asset Management & Truste, Robert Nause, Secretary & Treasurer
Title:
Trustee
Date: April 15, 2026
[ Signature Page to Schedule 13E-3 ]
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
ROBERT A. ORTENZIO APRIL 2014 TRUST FOR MADELINE G. ORTENZIO
By:
/s/ Robert Nause
Name:
Select Asset Management & Truste, Robert Nause, Secretary & Treasurer
Title:
Trustee
Date: April 15, 2026
[ Signature Page to Schedule 13E-3 ]
### EX-99.(C)(II) - EXHIBIT 99.(C)(II)
EX-99.(C)(II)
2
tm2611660d2_ex99-cii.htm
EXHIBIT 99.(C)(II)
Exhibit 99.(c)(ii)
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| March 1, 2026
Confidential Discussion Materials
Prepared for Project Stallion
WELLS
FARGO J.EMorgan
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| 2
C O N F I D E N T I A L
P R O J E C T S T A L L I O N
Topics for
Today’s
Discussion
I. Transaction Summary
II. Stallion Update
III. Exit Considerations
J.RMorgan WELLS
FARGO
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| 3
C O N F I D E N T I A L
P R O J E C T S T A L L I O N
Transaction Update
▪ On 11/24/25, Bob Ortenzio, Marty Jackson and WCAS
(the “Consortium”) submitted a non-binding Indication of
Interest (“IOI”) to acquire Stallion for $16.00 – $16.20 per
share
▪ Stallion acknowledged receipt of the IOI and issued a
public statement the following morning
▪ Subsequently, Stallion formed a Special Committee, and
hired legal and financial advisors
▪ On 1/15/25, the Consortium and its advisors received
access to Stallion’s VDR
▪ On 1/27/25 and 1/28/25, Stallion held Management
Presentations and a dinner with the Consortium
▪ During January and February, the Consortium and its
advisors conducted detailed due diligence through
numerous diligence calls and review of the VDR
▪ On 2/22/26, the Consortium submitted a revised offer of
$16.00 per share
▪ On 2/28/26, the Consortium and Stallion agreed to an
updated offer of $16.50 per share
Transaction Update
Source: Stallion Management Sellside Projections, FactSet | Market Data as of 2/27/26 | Note: Selected Healthcare Services Public Companies include Acadia Healthcare, Ardent Health, Concentra, Davita Inc, Encompass Health, Ensign Group,
Lumexa Imaging, Option Care Health, PACS Group, RadNet, Surgery Partners, Tenet Healthcare, Universal Health Services, and U.S. Physical Therapy | 1 Calculated based on midpoint of the offer range and Stallion’s unaffected closing share price of
$13.65 on 11/21/25 | 2 Based on 3/31/26 Adj. NTM EBITDA of approximately $525M; Adj. EBITDA defined as Reported EBITDA less non-controlling interest expense plus income from equity in affiliates
Indexed Share Price Performance Since 10/31/25
(10%)
(5%)
0%
5%
10%
15%
20%
10/31/25 11/29/25 12/28/25 1/26/26 2/24/26
Stallion
Selected HCS Public Companies
S&P 500
8%
1%
16%
Buyer Consortium Offer History
11/24/25: Initial IOI of $16.00 – $16.20
11/24/25 2/22/26 2/28/26
Offer Price per Share $16.00 - $16.20 $16.00 $16.50
Premium to
Unaffected1 +18% +17% +21%
TEV ($B) $3.8B $3.8B $3.9B
TEV / NTM Adj.
EBITDA2 7.4x 7.3x 7.5x
Q4 Earnings
Release
2/19/2026
2/22/26: Revised offer of $16.00 2/28/26: Updated offer of $16.50
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| I. Transaction Summary
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| 5
C O N F I D E N T I A L
P R O J E C T S T A L L I O N
Summary of Selected Transaction Terms
Source: Project Stallion - Agreement and Plan of Merger (“Merger Agreement”)
Updated Offer &
Consideration
Financing
Shareholder
Approval
Timing
▪ $16.50 per share, representing a 21% premium to the unaffected share price of $13.65 as of
market close on 11/21/25
▪ All cash consideration for shares not held by the Consortium
▪ Consortium intends to roll over ~12.4% of the Company’s outstanding shares they control, and
may invite additional members of management or the Board to roll over their outstanding equity
▪ No financing contingency
‒ Committed equity financing from funds affiliated with WCAS
‒ Fully committed debt financing from Wells Fargo and J.P. Morgan
▪ Subject to approval by a majority of the votes cast by Stallion shareholders who are not affiliated
with the Consortium
▪ The Consortium does not anticipate substantial regulatory or other hurdles or delays to
consummating a Potential Transaction
▪ The Potential Transaction will be subject to customary closing conditions and approvals substantially
as presented in the draft Agreement and Plan of Merger delivered to the Special Committee’s legal
counsel
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| 6
C O N F I D E N T I A L
P R O J E C T S T A L L I O N
Transaction Overview
Source: Stallion Management Sellside Projections, Company Filings, FactSet | Market data as of 2/27/26 | 1 Net debt as of 12/31/25; calculated as ~$1,845M of gross debt less ~$27M of cash | 2 Adj. EBITDA defined as Reported EBITDA less non-controlling interest expense plus income from equity in affiliates | 3 Adj. EBITDA rounded to the nearest $25M increment | 4 Assumes 10% MIP at exit; illustrative 7.0x NTM Adj. EBITDA multiple at exit on 12/31/30
1
Current Updated Offer
($ in Millions, Except Per Share Amounts) $14.97 $16.50
Metric Implied Premium / (Discount)
Current Price Per Share: $14.97 - - 10%
Pre-Initial Offer
52-Week High (11/26/24): $21.34 (30%) (23%)
52-Week Low (8/6/25): $11.65 28% 42%
4-Weeks Prior (10/24/25): $14.29 5 % 15%
30-day VWAP: $13.57 10% 22%
Unaffected (11/21/25): $13.65 10% 21%
Post-Initial Offer
Intraday High (2/17/26): $16.59 (10%) (1%)
Intraday Low (2/20/26): $14.53 3 % 14%
Implied Equity Value $1,857 $2,046
(+) Net Debt 1,819 1,819
Implied Enterprise Value $3,675 $3,865
Implied Enterprise Value / Adj. EBITDA
FY2025A Adj. EBITDA ($479M) 7.7x 8.1x
FY2026E Adj. EBITDA (~$500M) 7.2x 7.6x
Sponsor Returns
IRR 23%
MOIC 2.7x
4
2
3
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| 7
C O N F I D E N T I A L
P R O J E C T S T A L L I O N
Source: Stallion Management Sellside Projections, Company Filings | Note: 2025A figures represent actuals; 2026E figures and beyond have been rounded (Revenue to the nearest $250M increment; Adj. EBITDA to the nearest $25M increment);
Revenue growth and EBITDA margin figures have been rounded to the nearest 1% increment | 1 Adj. EBITDA defined as Reported EBITDA less non-controlling interest expense plus income from equity in affiliates
Financial Projection Summary
Revenue Adj. EBITDA1
($ in Millions) ($ in Millions)
$5,453
$5,750 $6,000 $6,250 $6,500
$7,000
2025A 2026E 2027E 2028E 2029E 2030E
$479 $500
$575
$650 $700
$775
2025A 2026E 2027E 2028E 2029E 2030E
5% CAGR
% Margin
5% 5% 5% 5% 5% 5% 9% 9% 10% 11% 11%
% Growth
10% CAGR
10%
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| II. Stallion Update
|
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| 9
C O N F I D E N T I A L
P R O J E C T S T A L L I O N
High (11/26/24)
Low (8/6/25)
Unaffected (11/21/25)
$10
$13
$15
$18
$20
$23
$25
Nov-24 Jan-25 Mar-25 May-25 Jul-25 Sep-25 Nov-25 Jan-26
Stallion | Annotated Share Price Performance
Source: Company Filings, Press Releases, FactSet | Market data as of 2/27/26
$14.97
$11.65
2
3
4
$21.34
Nov 25, 2024
Tax-free spinoff of
Concentra
+2%
Feb 20, 2025
Q4’24 earnings
miss
(7%)
May 2, 2025
Q1’25 earnings
miss
(22%)
6
Jul 31, 2025
Q2’25 mixed
earnings
(15%)
7
Oct 30, 2025
Q3’25 earnings beat
(3%)
5
Stallion Share Price Performance Since Concentra Carve Out (11/25/24)
Nov 24, 2025
Take-private
proposal at $16.00 -
$16.20 per share
+11%
Feb 19, 2026
Q4’25 earnings
miss
(7%)
8
$13.65
$16.50
Updated Offer (2/28/26)
1
Feb 22, 2026
Refined take-private offer to
$16.00 per share
(2%)
Feb 28, 2026
Updated take-private offer of
$16.50 per share
--
1 2 3 4 5 6 7 8 9
9
|
|
| 10
C O N F I D E N T I A L
P R O J E C T S T A L L I O N
▪ One Time Healthcare Insurance Cost: Health insurance
expenses spiked ~$15M YoY due to higher-cost claimants and
increased benefit utilization
▪ Mixed Performance vs. Consensus: Reported Q4 revenue of
$1.4B (~2% beat), but Adj. EBITDA of $105M (~18% miss) and
Adj. EPS of $0.16 (~32% miss)
▪ Outpatient Rehab Weakness: OP Rehab Q4 Adj. EBITDA fell
YoY to $11.2M (3.4% margin) from $26.6M (8.3% margin)
‒ Driven by higher labor costs and a 4% decline to revenue
per visit due to Medicare reimbursement cuts
▪ Next-Day Share Price Reaction: (7%)1
Q4 2025 Earnings Summary
Source: Wall Street Equity Research, Company Filings, FactSet | Market Data as of 2/27/26 | 1 Next-day share price ($15.01) as of market close on 2/20/26 | 2
vs. Consensus as of 2/18/26 | 3 Represents reported EBITDA, unburdened for non-controlling interest expense and excluding income from equity in affiliates | 4 Including revenue per patient day across both the CIRH and IRF segments | 5 Calculated as the midpoint of FY2026 guidance vs FY2025 actuals | 6 Calculated as the
midpoint of FY2026 guidance vs FY2026 consensus estimates
($ in Actuals, Admissions
in Actuals) FY25 Y/y Δ Q4’25 Y/y Δ
Occupancy (%) 73% +45bps 71% +49bps
# of Admissions 72,913 +5% 18,402 +6%
Revenue per
Patient Day4
$4,490 +4% $4,623 +6%
($ in Millions, Except
Per Share Amounts) Low High Implied
Y/y Δ5
Consensus
Δ6
Revenue $5,600 $5,800 +5% +1%
EBITDA3 $520 $540 +8% (4%)
Adj. EPS $1.22 $1.32 +10% (2%)
Q4 EBITDA:
$105M
Y/y Change: (10%)
Beat/Miss2
: (18%)
Q4 Revenue:
$1.4B
Y/y Change: +6%
Beat/Miss2
: +2%
Q4 Adj. EPS:
$0.16
Y/y Change: +184%
Beat/Miss2
: (32%)
FY EBITDA:
$493M3
Y/y Change: (3%)
Beat/Miss2
: (5%)
FY Revenue:
$5.5B
Y/y Change: +5%
Beat/Miss2
: +1%
FY Adj. EPS:
$1.16
Y/y Change: +128%
Beat/Miss2
: (6%)
Highlights
Operational KPIs FY2026 Guidance
|
|
| 11
C O N F I D E N T I A L
P R O J E C T S T A L L I O N
Stallion & Selected Public Companies | Share Price Performance
Source: FactSet | Market Data as of 2/27/26 | 1 Share price performance reflects market value-weighted median of selected public companies | 2 Selected healthcare services public companies include Acadia Healthcare, Ardent Health, Concentra,
DaVita Inc., Encompass Health, Ensign Group, Lumexa Imaging, Option Care Health, PACS Group, RadNet, Surgery Partners, Tenet Healthcare, Universal Health Services and U.S. Physical Therapy
Indexed Share Price Performance Since Concentra Carve Out (11/25/24)
(50%)
(30%)
(10%)
10%
30%
Nov-24 Jan-25 Mar-25 May-25 Jul-25 Sep-25 Nov-25 Jan-26
Stallion
Selected HCS Public Companies1,2
S&P 500
(30%)
17%
15%
|
|
| III. Exit Considerations
|
|
| 13
C O N F I D E N T I A L
P R O J E C T S T A L L I O N
Strategic Sale
▪ Opportunity to
consolidate leading,
scaled post-acute care
platform
▪ Synergy potential for
select buyers
▪ Limited interest from
strategic buyers
historically
▪ Availability of strategic
counterparties that
understand LTACHs and
can drive synergies
▪ Ability to navigate
through reimbursement
and regulatory exposure
Sponsor Recap
▪ Similar rationale to the
“Strategic Sale” thesis
▪ Lower appetite for
government
reimbursement risk
exposure from sponsors
▪ LTACH variability may
continue to be
challenging for sponsors
to underwrite
▪ Sponsor dry powder
▪ Recent transactions and
operational experience
▪ Ability to navigate
through reimbursement
and regulatory exposure
IPO
▪ Ability for investors to
monetize over time
during favorable market
conditions
▪ Execution of growth
initiatives increase
attractiveness of
investment for re-IPO
and create additional
upside for all
shareholders
▪ Realization of expected
growth ahead of IPO
▪ Ability to re-position
company favorably to
peer set
▪ Appropriate pro forma
leverage levels at time
of IPO
Potential Exit Considerations for Stallion
Perspectives
on Exit
Alternatives
Key Success
Factors
Portfolio Optimization
▪ Assess opportunities to
reduce leverage through
portfolio optimization
▪ Potential separation of
volatile LTACH assets to
isolate more pure-play
RemainCo with direct
public comps
▪ Potential strategic
carve-out of OP Rehab
clinics to national
consolidators seeking
scaled physical therapy
platforms
▪ Minimal operational and
financial dissynergies in
any potential separation
/ portfolio optimization
undertaking
▪ Collective value of
individual assets within
portfolio are greater
than current value of
combined assets
|
|
| 14
C O N F I D E N T I A L
P R O J E C T S T A L L I O N
CIRH Segment Volatility Has Weighed on Stallion’s Valuation
Source: Company Filings, Wall Street Equity Research, FactSet | Market Data as of 2/27/26 | 1 Selected public companies includes Concentra, Encompass, Lumexa Imaging, Option Care, RadNet, Surgery, USPH; represents difference in median values
… Impacting Stallion’s Overall Valuation & Creating a Sustained
Discount vs. Selected Public Companies1
CIRH’s Revenue & Margin Profile Has Been Impacted by Regulatory
& Labor Cost Headwinds…
(7.7%)
(1.8%)
1.7%
4.7%
13.1%
8.1%
(0.6%)
2.9%
6.3%
0.3%
12.8%
14.6%
13.9% 13.9%
16.5%
11.9%
5.0%
10.7%
12.3%
10.3%
(10%)
(5%)
0%
5%
10%
15%
20%
(10%)
(5%)
0%
5%
10%
15%
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
6.4%
3.9%
12.2%
= YoY Revenue Growth (%) (LHS)
= Adj. EBITDA Margin (%) (RHS)
= CARES Act Normalized Adj. EBITDA Margin (%)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
(10.0x)
(9.0x)
(8.0x)
(7.0x)
(6.0x)
(5.0x)
(4.0x)
(3.0x)
(2.0x)
(1.0x)
0.0x
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
CIRH as % at business mix (RHS)
∆ in Stallion NTM EBITDA multiple vs. Selected Public Companies (LHS)
Concentra separated in
November 2024
∆ (2.3x)
|
|
| 15
C O N F I D E N T I A L
P R O J E C T S T A L L I O N
4.0x
7.0x
10.0x
13.0x
16.0x
19.0x
22.0x
25.0x
28.0x
Jan-19 Jan-20 Jan-21 Jan-22 Jan-23 Jan-24 Jan-25 Jan-26
Stallion Has Traded at a Discount to Selected Companies
Source: Company Filings, Wall Street Equity Research, FactSet | Market Data as of 2/27/26 | Note: Adj. EBITDA defined as Reported EBITDA inclusive of income from equity in affiliates and burdened by non-controlling interest expense
Historical EV / NTM Adj. EBITDA Multiple Since 2019
8.8
9.7x
CON Spin-Off
11/25/24
7.0x
Stallion
13.3x
Average NTM Adj. EBITDA Multiple Since
2019 2020 2021 2022 2023 2024 2025 YTD
2026
8.2x 8.6x 8.6x 8.2x 8.7x 8.6x 6.9x 7.0x
9.5x 10.5x 10.5x 9.1x 9.6x 10.4x 10.9x 9.4x
21.4x 19.7x 19.8x 16.0x 18.1x 16.6x 14.0x 13.7x
Stallion
IOI Submission
11/24/25
COVID-19
Refined IOI
Submission
2/22/2026
|
|
| 16
C O N F I D E N T I A L
P R O J E C T S T A L L I O N
Financial Profiles & Multiples for Selected Public Companies
Source: Stallion Management Sellside Projections, FactSet, Wall Street Equity Research | Market Data as of 2/27/26 |
1 Financial profile reflects the median of selected public companies, where applicable; Growth metrics based on 2025E-2027E
CAGR; margin based on 2026E and reflects EBITDA inclusive of EIA income and burdened for NCI expense; uFCF Conversion = (Adj. EBITDA – CapEx) / Adj. EBITDA | 2 Burdened for NCI expense and inclusive of income from EIA | 3 Represents the
approximate range of the average trading multiples for selected companies since 2024 | 4 As of 2/27/26 | 5 Represents Segment-Level Adj. EBITDA margin which is burdened for allocated NCI expense and corporate overhead,and inclusive of income
from equity in affiliates; corporate overhead allocated based on 2026E Stallion management allocations; NCI and EIA allocated based on 2025A segment contribution
Acute Care & SNF Providers Inpatient Rehab Outpatient Rehab
Revenue Growth ~8%
Adj. EBITDA Margin ~24%
uFCF Conversion ~40%
Range3 9x – 11x
Current4 9.7x
Revenue Growth ~6%
Adj. EBITDA Margin ~15%
uFCF Conversion ~87%
Range3 13x – 15x
Current4 13.3x
Revenue Growth ~5%
Adj. EBITDA Margin ~13%
uFCF Conversion ~76%
Range3 ~4x – 10x
Current4 ~9x
Financial
Profile1
EV / NTM
Adj.
EBITDA2
Stallion
2030E
Segment
Projections
Current Market Selected Comps Preferred Market Selected Comps in Re-IPO
Revenue Growth ~3%
Adj. EBITDA Margin5 ~9%
Revenue Growth ~7%
Adj. EBITDA Margin5 ~18%
Revenue Growth ~6%
Adj. EBITDA Margin5 ~11%
|
|
| 17
C O N F I D E N T I A L
P R O J E C T S T A L L I O N
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|
### EX-99.(C)(III) - EXHIBIT 99.(C)(III)
EX-99.(C)(III)
3
tm2611660d2_ex99-ciii.htm
EXHIBIT 99.(C)(III)
Exhibit 99.(c)(iii)
|
| November 2025
Preliminary Discussion Materials
Prepared for Project Stallion
DRAFT – Preliminary & For Reference Only WELLS
FARGO J.PMorgan
|
|
| DRAFT – Preliminary & For Reference Only 2
CONFIDENTIAL
PROJECT STALLION
Table of
Contents
I. Executive Summary
II. Outside-In Perspectives on Stallion
III. Preliminary Transaction Analysis
IV. Potential Exit Considerations
Supplemental Analysis
WELLS
FARGO J.EMorgan
|
|
| I. Executive Summary
|
|
| DRAFT – Preliminary & For Reference Only 4
CONFIDENTIAL
PROJECT STALLION
Source: Company Filings, Wall Street Equity Research | 1 Based on number of locations as of 09/30/25 | 2 Based on number of licensed beds as of 09/30/25
Executive Summary
Situation
Overview
• Stallion is one of the largest post-acute operators in the United States
‒ #1 Critical Illness Recovery Hospital (“CIRH”, “Long-Term Acute Care Hospital” or “LTACH”) network1
‒ Top 5 Inpatient Rehabilitation Hospital (“IRF”) network2
‒ #1 Outpatient Rehabilitation (“OP Rehab”) network1
• While understood by the lender community, Stallion has been underappreciated by equity investors
‒ Despite its demonstrated operating experience over ~30 years, Stallion has consistently traded at a discount to
its public peers, mostly due to regulatory, Medicare reimbursement and labor concerns related to its CIRH
segment
• Welsh, Carson, Anderson & Stowe (“WCAS”), Bob Ortenzio (Executive Chairman and Co-Founder) and Marty
Jackson (Senior Executive Vice President of Strategic Finance and Operations) (collectively the “Buyer
Consortium”) have an opportunity to:
i. Acquire Stallion at a premium to its current trading value,
ii. Optimize the capital and operational structure of the organization; and,
iii. Re-position the business for an attractive exit in the future
• Under private ownership, the Buyer Consortium will have the capitalization and free cash flow generation to re-invest in Stallion’s Rehabilitation Hospital and Outpatient Rehabilitation segments
Investment
Opportunity
Exit
Perspectives
• Assuming the Buyer Consortium acquires Stallion, the business is expected to be positioned as a leading post-acute business by 2030 – with projected ~$825mm in 2030E Adj. EBITDA, ~12% Adj. EBITDA margins and IRF and
OP Rehab constituting ~2/3 of consolidated EBITDA
‒ Advisors expect the additional scale and shift in business mix toward more stable, higher growth and higher
margin segments will position Stallion to evaluate a number of attractive exit alternatives
|
|
| II. Outside-In Perspectives on Stallion
|
|
| DRAFT – Preliminary & For Reference Only 6
CONFIDENTIAL
PROJECT STALLION
$10
$13
$15
$18
$20
$23
$25
Nov-24 Feb-25 May-25 Aug-25
Stallion | Public Market Overview & Trading Statistics
Source: Company Filings, Press Releases, FactSet | Market data as of 11/21/2025 | 1 Share count, Debt and Non-Controlling Interest figures as of 9/30/2025; Equity Investment in Affiliate as of 12/31/2024; Net Debt includes cash and equivalents
and current financial assets; Net Debt is pro forma for Q3’2025 dividend | 2 2025E Adj. EBITDA figure represents midpoint of management guidance; 2026E Adj. EBITDA figure has been rounded to the nearest $25M increment
$13.65
$11.77
1
2 3
4
$21.34
Nov 25, 2024
Stallion completed the tax-free
spinoff of Concentra, streamlining its
portfolio
1
+2%
Feb 20, 2025
Q4 2024 Earnings had misses across
the board, triggering a steep selloff as
investor confidence took a hit
2
(7%)
May 2, 2025
Q1 2025 Earnings Call, management
flagged margin pressure and Medicare
cuts, triggering a steep sell off
3
(22%)
Jul 31, 2025
Q2 2025 Earnings, beat EPS, missed
revenue, cautious tone on LTACHs
and regulatory risk drove a sell off
4
(15%)
Oct 30, 2025
Q3 2025 Earnings beat on EPS and
revenue, supported by strong rehab
volumes and positive guidance tone
5
(3%)
5
Stallion Share Price Performance Since Concentra Carve Out (November 25, 2024)
Stallion Public Market Overview
2
($ in Millions, Except Per Share Amounts) Current 1 Current 1
Share Price (11/20/2025) $13.65 Implied Equity Value $1,690
Fully Diluted Shares Outstanding 123.818 (+) Net Debt 1,737
Implied Equity Value $1,690 (+) Non-Controlling Interest 331
(–) Equity Investment in Affiliate (321)
Implied Enterprise Value $3,437
Metric Multiple
FY2025E EV / Adj. EBITDA $520 6.7x
FY2026E EV / Adj. EBITDA $550 6.2x
|
|
| DRAFT – Preliminary & For Reference Only 7
CONFIDENTIAL
PROJECT STALLION
Stallion & Selected Public Companies | Share Price Performance
Source: FactSet | Market Data as of 11/21/2025 | 1 Share price performance reflects market value-weighted median of peers | 2 Selected healthcare services public companies include Acadia Healthcare, Ardent Health, Concentra, DaVita Inc.,
Encompass Health, Ensign Group, Option Care Health, PACS Group, RadNet, Surgery Partners, Tenet Healthcare, Universal Health Services and U.S. Physical Therapy
Indexed Share Price Performance Since Concentra Carve Out (November 25, 2024)
(50%)
(30%)
(10%)
10%
30%
Nov-24 Dec-24 Jan-25 Feb-25 Mar-25 Apr-25 May-25 Jun-25 Jul-25 Aug-25 Sep-25 Oct-25
Stallion
Selected Healthcare Services Public Companies1,2
S&P 500
(36%)
5%
10%
|
|
| DRAFT – Preliminary & For Reference Only 8
CONFIDENTIAL
PROJECT STALLION
--
5x
10x
15x
20x
25x
30x
Nov-20 Nov-21 Nov-22 Nov-23 Nov-24 Nov-25
Stallion & Selected Public Companies | Historical Valuation
Source: Company Filings, Wall Street Equity Research, FactSet | Market Data and Estimates as of 11/21/2025 | 1 Enterprise value calculated as fully diluted market capitalization plus net debt, noncontrolling interests, preferred equity and less
equity method investments; NTM Adj. EBITDA based on median consensus estimates and defined as NTM earnings before interest, taxes, depreciation and amortization, unburdened by stock-based compensation expense and non-controlling
interest expense, excluding income (losses) from equity in affiliates, adjusted to exclude non-recurring items | 2 Selected healthcare services public companies include Acadia Healthcare, Ardent Health, Concentra, DaVita Inc., Ensign Group, Option
Care Health, PACS Group, RadNet, Surgery Partners, Tenet Healthcare and Universal Health Services
5-Year Historical Enterprise Value / NTM Adj. EBITDA Multiple1
6.2x
Completion of
Concentra
Carve Out
11/25/2024
9.7x
12.6x
9.0x
Stallion
Selected Healthcare Services Public Companies2
U.S. Physical Therapy
Encompass Health
|
|
| DRAFT – Preliminary & For Reference Only 9
CONFIDENTIAL
PROJECT STALLION
Stallion | Wall Street Equity Analyst Research Summary
Source: Wall Street Equity Research, FactSet | Market Data and Estimates as of 11/21/25
Revenue Adj. EBITDA
Broker Date Rating
Price
Target 2025E 2026E 2027E 2025E 2026E 2027E Valuation Methodology
Broker A 11/03/25 Buy $21.00 $5,426 $5,692 - $470 $547 - SOTP (Implies 8.3x '26E EBITDA)
Broker B 11/12/25 Buy $20.00 $5,416 $5,651 $5,888 $513 $542 $596 N/A
Broker C 11/05/25 Buy $20.00 $5,409 $5,636 $5,891 $500 $532 $571 SOTP (~10x '26E Rehab Hospital EBITDA, ~7x '26E
Outpatient Rehab / CIRH EBITDA)
Broker D 10/31/25 Buy $17.00 $5,433 $5,679 $5,953 $521 $552 $589 7.8x '26E EBITDA-NCI
Broker E 11/06/25 Buy $17.00 $5,409 $5,638 $5,955 $493 $533 $577 Blended P/E, EV/EBITDA and FCF/EV (Implies 7.0x '26E EBITDA)
Broker F 10/31/25 Hold $14.00 $5,424 $5,630 $6,046 $517 $555 $604 '26 EBITDA-NCI
Median $18.50 $5,420 $5,645 $5,953 $506 $545 $589
Implied Premium to Current: 35.5%
Equity Analyst Ratings & Consensus Estimates
Equity Analyst Recommendations Over Time
Nov-24 Dec-24 Jan-25 Feb-25 Mar-25 Apr-25 May-25 Jun-25 Jul-25 Aug-25 Sep-25 Oct-25 Nov-25
100
80
60
40
20
$0 0
$10
$20
$30
$40
$13.65
$18.50
5 5 5 5 5 6 6 6 6 6 6 6 6
(60%)
(40%)
(60%)
(40%)
(60%)
(40%)
(80%) (80%) (83%) (83%) (83%) (100%) (83%) (83%) (83%) (83%)
(20%) (20%) (17%) (17%) (17%) (17%) (17%) (17%) (17%)
Buy Hold Sell Share Price Median Target Price # of Brokers
($ in Millions, Except Per Share Amounts)
|
|
| III. Preliminary Transaction Analysis
|
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| DRAFT – Preliminary & For Reference Only 11
CONFIDENTIAL
PROJECT STALLION
Source: Company Filings, Wall Street Equity Research, FactSet | Note: 2024A figures represent actuals; 2025E figures represent the midpoint of Stallion management guidance as of 11/20/2025; 2026E and beyond are extrapolated and have been
rounded (Revenue to the nearest $250M increment; Adj. EBITDA to the nearest $25M increment); Revenue growth and EBITDA margin figures have been rounded to the nearest 1% increment
Stallion | Preliminary Financial Projection Summary
Revenue Adj. EBITDA
($ in Millions) ($ in Millions)
$5,187 $5,400
$5,750 $6,000 $6,250 $6,500
$7,000
2024A 2025E 2026E 2027E 2028E 2029E 2030E
$510 $520 $550 $600
$675
$750
$825
2024A 2025E 2026E 2027E 2028E 2029E 2030E
5% CAGR
% Margin
5% 5% 5% 5% 5% 5% 10% 10% 10% 10% 11% 12% 12%
% Growth
8%
10% CAGR
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| DRAFT – Preliminary & For Reference Only 12
CONFIDENTIAL
PROJECT STALLION
Current Illustrative Offer Price Per Share
($ in Millions, Except Per Share Amounts) $13.65 $15.00 $15.50 $16.00
Implied Premium / (Discount)
Current Price Per Share: $13.65 10% 14% 17%
52-Week High (Post-CON): $21.34 (30%) (27%) (25%)
30-day VWAP: $13.61 10% 14% 18%
60-day VWAP: $13.27 13% 17% 21%
90-day VWAP: $13.22 13% 17% 21%
4-Weeks Prior: $13.81 9% 12% 16%
Fully Diluted Shares 123.8 123.8 123.8 123.8
Implied Equity Value $1,690 $1,857 $1,919 $1,981
(+) Net Debt 1,737 1,641 1,641 1,641
(+) Non-Controlling Interest 331 342 342 342
(-) Equity Investment in Affiliate (321) (357) (357) (357)
Implied Enterprise Value $3,437 $3,484 $3,545 $3,607
Implied Enterprise Value / Adj. EBITDA
CY2025E EBITDA ($520M) 6.7x 6.8x 6.9x 7.0x
CY2026E EBITDA ($550M) 6.2x 6.2x 6.4x 6.5x
Transaction Financing
Total Equity $1,029 $1,091 $1,153
Pro Forma Net Debt 2,584 2,584 2,584
Sponsor Returns
IRR 31% 30% 28%
MOIC 3.6x 3.4x 3.2x
Source: Company Filings, Wall Street Equity Research, FactSet, Bloomberg | Market Data as of 11/21/2025 | Note: Illustrative transaction close of 3/31/2026, 5.0x LTM total leverage, including ~$1.0B new term loan; Net Debt, Non-Controlling
Interest and Equity Investment in Affiliate figures shown under Illustrative Offer Prices have been bridged to assumed transaction close; 2025E Adj. EBITDA figure represents midpoint of management guidance; 2026E Adj. EBITDA figure has been
rounded to the nearest $25M increment | 1 Illustratively assumes 6.5x NTM Adj. EBITDA multiple with full sale at YE2030; includes management promote
Stallion Acquisition | Preliminary LBO Overview
Analysis at Various Prices
1
|
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| DRAFT – Preliminary & For Reference Only 13
CONFIDENTIAL
PROJECT STALLION
Purchase Price
Offer Price / Share $15.00 $15.50 $16.00
Entry NTM EBITDA Multiple 6.1x 6.2x 6.3x
% Premium to Current 10% 14% 17%
27% 26% 25%
29% 28% 26%
31% 30% 28%
31% 30% 28%
36% 35% 33%
41% 39% 38%
29% 28% 26%
31% 30% 28%
34% 32% 31%
9% 5% 19% 17% 16%
11% 8% 25% 24% 23%
12% 10% 31% 30% 28%
Leverage at Close
4.5x
4.8x
5.0x
2030E
EBITDA
Margin
25E - '30E
EBITDA
CAGR
NTM Exit Multiple
6.5x
7.5x
8.5x
'25E - '30E
Revenue CAGR
4%
5%
6%
Source: Company Filings, Wall Street Equity Research, FactSet | Note: Assumes 5.0x total leverage and 6.5x NTM exit multiple unless depicted otherwise | 1 Entry NTM EBITDA Multiple based on 3/31/2026E NTM EBITDA of ~$575M | 2 Premium to
Current based on $13.65 closing share price on 11/21/2025
Stallion Acquisition | Preliminary LBO IRR Sensitivity Analyses
Transaction
Sensitivities
Operational
Sensitivities
Illustrative Case
2025E Margin
1
2
|
|
| IV. Potential Exit Considerations
|
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| DRAFT – Preliminary & For Reference Only 15
CONFIDENTIAL
PROJECT STALLION
Strategic Sale
• Compelling, market-leading
post-acute care platform
with tailwinds for Inpatient
Rehabilitation segment
• Scale of business, as well as
long track record of success,
will be viewed positively
• Potentially synergistic for
some buyers (e.g., payors,
health systems)
• Limited interest from
strategic buyers historically
while a public company
• Availability of strategic
counterparties and those
that understand LTACHs, and
can drive synergies
• Ability to navigate through
reimbursement and
regulatory exposure
Sponsor Recap
• Similar rationale to the
“Strategic Sale” thesis
• Proven ability to operate
during periods of uncertainty
(e.g. COVID, recessions)
• Limited interest from
sponsor buyers historically
while a public company
• Lower appetite for
government reimbursement
risk exposure, and particularly
LTACHs – given complexity
and variability in the segment
• Sponsor dry powder
• Recent transactions and
operational experience
• Ability to navigate through
reimbursement and
regulatory exposure
IPO
• Proven operators with
extensive public experience –
long track record of success
in the public markets
• Growth initiatives provide
additional upside to all
shareholders
• Ability to re-IPO Stallion as a
business repositioned to have
greater exposure to higher-growth Rehabilitation
Hospitals and Outpatient
Rehabilitation segments
• Ability to realize expected
growth ahead of IPO
• Market backdrop and ability
to comp against the right
peer set
• Driving appropriate pro
forma leverage levels at time
of IPO
Exit Considerations for Stallion
Perspectives on Exit
Alternatives
Key Components to
Establishing
Conviction
|
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| DRAFT – Preliminary & For Reference Only 16
CONFIDENTIAL
PROJECT STALLION
Key Attributes of Recent Healthcare Services IPOs
• Well-defined relative value to public comparables
• Set reasonable discount to public peers to create attractive entry point
• Defensible fundamental approach to underpin valuation
• Both qualitative & quantitative feedback are key in informing an appropriate range
Unique Business
Models
Scale, Growth, &
Profitability
Macro / Sector Risk
Responsible
Leverage
Clear Valuation
Framework
• Strong competitive positioning – demonstrated leadership and execution
• Clear differentiation and deep moat from competitors
• Highly visible, recurring revenue models
• Leverage technology to optimize efficiency and provide data-driven solutions
• Preference for businesses with meaningful scale and ability to articulate attractive TAM
• Strong economics that drive profitability and free cash flow
• Stress tested growth projections and ability to expand EBITDA growth and margin over time
• Flexible balance sheet to pursue opportunistic M&A
• Companies with limited tariff and / or government exposure
• Preference towards companies with insulated business models
• Healthy new issue performance and core peers trading at attractive valuations
•
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| DRAFT – Preliminary & For Reference Only 17
CONFIDENTIAL
PROJECT STALLION
33
5
44
7
22
4
54
6
30
5
62
9
Duration of Sell-Down
Process (in Months)
Number of Sell-Down Events
Required to Exit Position
Exits Are Taking Longer & Requiring More Sell-Down Events
Source: Dealogic | 1 Defined as financial sponsors who maintained >50% ownership on the first trading day of the company and who achieved
|
|
| Supplemental Analysis
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| DRAFT – Preliminary & For Reference Only 19
CONFIDENTIAL
PROJECT STALLION
Selected Healthcare Services Public Companies
Source: Company Filings, Wall Street Equity Research, FactSet | Market Data as of 11/21/2025 | 1 Based on fully diluted shares calculated using outstanding options under the Treasury Stock Method | 2 Enterprise value calculated as fully diluted
market capitalization plus net debt, noncontrolling interests, preferred equity and less equity method investments | 3 Adj. EBITDA based on median consensus estimates and defined as NTM earnings before interest, taxes, depreciation and
amortization, unburdened by stock-based compensation expense and non-controlling interest expense, excluding income (losses) from equity in affiliates, adjusted to exclude non-recurring items
Market Data Financial Data Valuation Data
Share Price % of 52-Week Share Price Market Enterprise '25 - '27 CAGR Adj. EBITDA Margin 3 EV / EBITDA 3
Company Name (Ticker) 11/21/25 High
∆
YTD Cap 1 Value 2 Revenue Adj. EBITDA 2025E 2026P 2025E 2026P
Tenet Healthcare Corporation (THC) $191.96 88% 52% $16,989 $30,484 5.0% 4.4% 20.1% 19.7% 7.1x 7.0x
DaVita Inc. (DVA) $120.25 67% (20%) 8,971 20,180 3.2% 3.3% 20.3% 20.4% 7.4x 7.2x
Universal Health Services, Inc. Class B (UHS) $231.92 98% 29% 15,112 19,813 5.0% 4.0% 15.1% 14.8% 7.5x 7.4x
Encompass Health Corporation (EHC) $114.35 89% 24% 11,649 14,849 8.4% 7.9% 23.9% 23.9% 10.5x 9.6x
Ensign Group, Inc. (ENSG) $184.99 95% 39% 11,168 10,810 10.7% 10.8% 11.7% 11.9% 18.1x 16.1x
Surgery Partners, Inc. (SGRY) $15.84 61% (25%) 2,049 7,283 8.0% 8.9% 21.2% 21.5% 10.3x 9.2x
RadNet, Inc. (RDNT) $83.00 97% 19% 6,532 6,962 10.9% 16.0% 16.7% 18.0% 21.1x 18.1x
Option Care Health Inc (OPCH) $29.57 83% 27% 4,749 5,591 8.3% 7.7% 8.3% 8.2% 11.9x 11.2x
PACS Group, Inc. (PACS) $27.50 99% 110% 4,550 4,558 8.8% 13.1% 10.8% 11.1% 9.5x 8.4x
Concentra Group Holdings (CON) $20.23 85% (10%) 2,623 4,236 7.0% 8.2% 20.0% 20.3% 9.9x 9.1x
Acadia Healthcare Company, Inc. (ACHC) $15.18 32% (62%) 1,433 3,793 5.1% 2.9% 19.8% 18.8% 5.8x 5.7x
Ardent Health, Inc. (ARDT) $8.94 52% (48%) 1,279 2,255 5.0% 3.4% 10.2% 9.6% 3.5x 3.5x
U.S. Physical Therapy, Inc. (USPH) $71.63 71% (19%) 1,096 1,493 5.8% 7.4% 14.4% 14.6% 13.4x 12.5x
Total Median: 7.0% 7.7% 16.7% 18.0% 9.9x 9.1x
Total Average: 7.0% 7.5% 16.3% 16.4% 10.5x 9.6x
($ in Millions, Except Per Share Amounts)
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| DRAFT – Preliminary & For Reference Only 20
CONFIDENTIAL
PROJECT STALLION
Deals - 100
Premium %
1-Day 1-Week 4-Weeks
Mean 31% 33% 35%
Median 25% 26% 33%
25th Percentile 15% 16% 20%
75th Percentile 44% 47% 48%
Source: Company Filings, Refinitiv, FactSet | Note: Analysis represents 1-day unaffected share price for announced U.S.-based all-cash take-private transactions between $1 billion and $5 billion for the period 1/1/2015 to 6/30/2025; Excludes deals
with negative premiums; excludes energy, financial institutions and real estate segments
Premiums Paid Analysis | Selected All-Cash Take-Private Transactions
1-Day Premium: Selected All-Cash Deals, 2015 – Current, $1B - $5B Transaction Value
0-10% 11%-20% 21%-30% 31%-40% 41%-50% 51%-60% 61%-70% 71%-80% 81%-90% 91%-100% 100%
|
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| DRAFT – Preliminary & For Reference Only 21
CONFIDENTIAL
PROJECT STALLION
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Disclaimer
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### EX-99.(C)(IV) - EXHIBIT 99.(C)(IV)
EX-99.(C)(IV)
4
tm2611660d2_ex99-civ.htm
EXHIBIT 99.(C)(IV)
Exhibit 99.(c)(iv)
|
| Discussion Materials for
Goldman Sachs & Co. LLC
December 2025
Goldman Sachs does not provide accounting, tax, or legal advice. Notwithstanding anything in this document to the contrary, and except as required to enable
compliance with applicable securities law, you (and each of your employees, representatives, and other agents) may disclose to any and all persons the US federal
income and state tax treatment and tax structure of the transaction and all materials of any kind (including tax opinions and other tax analyses) that are provided to
you relating to such tax treatment and tax structure, without Goldman Sachs imposing any limitation of any kind.
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|
| 2
Key Questions for Today’s Discussion
1 How Would We Structure A Process for the Special Committee?
2 What Information Would We Need to Fully Evaluate the Range of Strategic Alternatives to Select?
3 What is the Universe of Potentially Interested Strategics and Sponsors for Outreach?
4 What Does the Broader Process Timeline Look Like?
|
|
| 3
4 Outside in Perspectives on the Consortium’s Offer & Path Forward
6 Is GS an Independent Advisor and What is the Scope of the GS Engagement?
5 How Can GS Help the Select Special Committee Maximize Value?
How Would We Structure A Process for the Special
Committee?
1
Key Objectives for
Special Committee
Process
◼ We are committed to a thorough and rigorous process that ensures the Special Committee’s recommendation will be fair and
objective
— Our valuation work will enable the Special Committee to have a point of view on standalone value of Select as well as potential
strategic alternatives that could be pursued when considering the current consortium’s proposal
– The results of this work will inform how we engage with potential counterparties, including the current consortium
— Run a fair and balanced buyer outreach to ensure the Special Committee can demonstrate that the most likely counterparties
had an opportunity to evaluate Select and put forth a credible offer
– We will leverage our relationships with the most likely buyers to quickly identify whether there are credible alternatives to the
current proposal
Immediate Next
Steps
◼ Identify working group within Select who will be working on Project Stallion to assist with diligence workstream
◼ Conduct detailed review of financial model and schedule model diligence call with core finance team
◼ Perform valuation analysis on Select’s long range financial forecast and present findings to Special Committee
◼ Finalize list of strategics and sponsors for outreach and review any additional inbound interest
◼ Prepare and populate data room for potential buyers, including responses to diligence requests outlined in WCAS diligence
workplan
◼ Evaluate existing shareholder register and develop plan for engaging with shareholders who have reached out following public offer
by buyer consortium
Principles for
Engaging
Additional
Counterparties
◼ Engage with both strategic and sponsor parties to evaluate interest in Select WholeCo or one its segments
— Important to engage with these parties in the near term to ensure all parties can move on the same timeline
◼ Provide the same data to all parties
— Virtual data room access can be utilized to provide access to all interested parties, including current buyer consortium
— Ensures that every party has access to the same information as they contemplate a potential indication of interest
— Staging what information is shared throughout the process is important to ensuring other potential counterparties believe they
have “ability to win” and then are willing to commit appropriate time / resources to engage
|
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| 4
4 Outside in Perspectives on the Consortium’s Offer & Path Forward
6 Is GS an Independent Advisor and What is the Scope of the GS Engagement?
5 How Can GS Help the Select Special Committee Maximize Value?
What Information Would We Need to Fully Evaluate the
Range of Strategic Alternatives Available to Select?
2
Remain Public Separate Pursue WholeCo Sale
Description
◼ Continue to operate as
standalone public company
◼ Divest another business unit or
portfolio of assets (e.g. CIRH)
◼ Sale of entire business to single
acquirer, whether strategic or
sponsor
Analyses
to Perform
◼ Bottoms up discounted cash flow
(DCF)
◼ Present value of future share
price (PVFSP) analysis
◼ Sum-of-the-parts (SOTP)
analysisd to assess value of
Select’s segments
— Inpatient Rehab
— Outpatient Rehab
— CIRH
◼ Strategic and sponsor ability to
pay analysis
◼ Review legal documentation of
joint venture agreements
A B C
Information Required for Analysis
More detailed diligence list included in the appendix
Financial Forecast by Segment Corporate Expense Detail
Real Estate Overview Joint Venture Detail
Separation and One-Time
Costs for Potential Break Up Analysis Current Capitalization
|
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| 5
Company Key Contacts
Sponsors
Carlyle ◼ Bobby Schmidt, Global Co-Head of HC
CD&R ◼ Ravi Sachdev, Head of
Healthcare
LGP ◼ Max Lin, Head of Health Care
Patient Square ◼ Pete Zippelius, Partner
Towerbookook
◼ Jim Momtazee, Managing
Partner
TPG
◼ Jeff Rhodes, Managing Partner
◼ Katherine Wood, Partner
What is the Universe of Potentially Interested
Strategics and Sponsors for Outreach?
Company Market Cap ($bn) Key Contacts
Strategics
UNH $ 299.8
◼ Wayne DeVeydt, CFO
◼ Rich Mattera, Chief
Development Officer
HCA 112.3
◼ Sam Hazen, CEO
◼ Monica Cintado,
Enterprise Development
THC 18.8
◼ Saum Sutaria, CEO
◼ Mike Maloney, EVP
Corporate Development
Encompass 11.4 ◼ Mark Tarr, President &
CEO
3
Outreach will be informed by existing dialogue to date with Select
Source: FactSet as of 05-Dec-2025
Note: Potential to consider other sponsors depending on historical dialogue
|
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| 6
GS Will Help Special Committee Conduct
a Thorough and Efficient Review That Will Ensure
Select’s Shareholders Are Well-Represented
4
Guiding
Principles
◼ Demonstrate independence and rigor in process in a way that will stand up to public scrutiny and potential litigation
◼ Explore all potential value maximizing alternatives beyond a WholeCo sale
◼ Demand transparency from current consortium on key deal terms
◼ Develop timeline and move forward efficiently, but do not let insider timing pressures drive process
Potential
◼ Diligence management projections and conduct valuation analysis to help inform Special Committee’s process and decision
making
— Evaluate all potential strategic alternatives beyond a WholeCo Sale – evaluate operational viability and potential to
enhance value relative to status quo or take private alternatives
— Review ability to pay of potential counterparties
— Determine credibility of any other offers that may emerge
◼ Review historical inbound interest received from other potential counterparties and run a private and targeted market check
— We do not think a public announcement is necessary given the disclosure from the WCAS proposal has effectively put
Select “in play”
— There is further benefit to conducting this process privately in order to minimize employee distraction / churn
— A “broad enough” outreach ensures that the Special Committee
and maximize competitive tension
◼ Evaluate current proposal from current consortium
— Review current consortium’s offer - financing, management compensation, governance and due diligence requirements
◼ Set timeline and process that aligns potential counterparties with the current consortium
— Maximize competitive tension to drive value for Select’s shareholders
— There is power in saying “No” to the current consortium – timing should be dictated by what optimizes value to Select
shareholders
— Other post-signing mechanisms such as go-shop provisions and reverse termination fees
record
Phase Subphase Key Workstreams
Phase 1 Valuation
◼ Diligence management projections and conduct thorough valuation analysis to help inform Special
Committee’s process and decision making
— Evaluate potential strategic alternatives beyond a WholeCo Sale – evaluate operational viability
and potential to enhance value relative to status quo or take private alternatives
— Review ability to pay of potential counterparties
— Determine credibility of any other offers that may emerge
◼ Review historical inbound interest received from other potential counterparties and run a private and
targeted market check as WCAS conducts diligence in parallel
◼ Respond to and engage with shareholders who have inbounded into Select
Phase 2
Targeted
Outreach
◼ We do not think a public announcement is necessary given the disclosure from the WCAS proposal has
effectively put Select “in play”
◼ There is further benefit to conducting this process privately in order to minimize employee distraction /
churn
◼ A “broad enough” outreach ensures that the Special Committee creates a strong record of identifying
potential alternatives and maximizes competitive tension
Evaluate
Potential
Alternatives
◼ Evaluate current proposal from current consortium and report back on findings to Special Committee
— Review current consortium’s offer - financing, management compensation, governance and due
diligence requirements
◼ Set timeline and process that aligns potential counterparties with the current consortium
— Maximize competitive tension to drive value for Select’s shareholders
— There is power in saying “No” to the current consortium – timing should be dictated by what
optimizes value to Select shareholders
— Other post-signing mechanisms such as go-shop provisions and reverse termination fees can be used
to further enhance the record
4
|
|
| 7
Perspectives on How Process May Unfold from
Here
◼ The current consortium has engaged Bain and outlined the diligence they will need to complete in order to be
ready to submit an updated proposal
◼ Focus is on understanding opportunity by segment and the potential to unlock value via a sum-of-the-parts
analysis
◼ Our perspective is that the details requested are appropriate, but will require significant commitment from Select
management in order to finalize due diligence
◼ We understand and recommend that Select is preparing information to be responsive to WCAS requests today,
but not to immediately engage with them on their diligence roadmap for the following reasons
— Important for the Special Committee to have a point of view on Select’s standalone valuation before
committing additional time and resources to this proposal
— Enables a process where all parties can be moving forward on the same timeline which can help create
competitive tension
◼ The Special Committee retains flexibility to accelerate work with the current consortium once it has a point of view
on valuation
— Furthermore, potential to further negotiate on value as a gating item for additional access / information
sharing
4
|
|
| 8
Illustrative Process Overview
Weeks 1-2 Weeks 3-6 Weeks 7-8 Weeks 9-10
◼ Financial Due Diligence & Analysis
— Review management projections
and conduct diligence with
management team
— Perform comprehensive valuation
analysis and present preliminary
read out to committee
— Evaluate viability and potential
valuation impact of other potential
strategic alternatives
— Prepare virtual dataroom
◼ Outreach Preparation
— Review historical buyer dialogue,
align on buyer outreach list
— Respond to and engage with
shareholders who have inbounded
into Select
— Prepare form NDA
◼ Commence outreach to potential
counterparties both on WholeCo (and
strategic alternatives as applicable)
◼ Provide limited data access (e.g.,
management forecast)
◼ Receive indications of interest and
determine viability of potential offers
◼ Path to accelerate, if no other parties
◼ Confirmatory due diligence
◼ Provide access to Select
management
◼ Negotiate merger agreement &
other key transaction documents
◼ Review financing commitments
◼ Receive & review final bids
◼ Final negotiations on
key terms (e.g., price,
structure, reverse
termination fee, go-shop v. no-shop,
governance, etc.)
◼ Finalize merger
agreement
◼ Complete fairness
opinion
◼ Finalize Special
Committee
recommendation
◼ Board approval
◼ Sign definitive
agreement and
announce transaction
Special Committee retains optionality to revise timeline throughout the process - viability of strategic alternatives
and other buyer engagement will provide additional information that can inform optimal path forward
4
December
M T W T F
22 23 24 25 26
29 30 31 1 2
January
M T W T F
29 30 31 1 2
5 6 7 8 9
12 13 14 15 16
19 20 21 22 23
26 27 28 29 30
February
M T W T F
2 3 4 5 6
9 10 11 12 13
16 17 18 19 20
23 24 25 26 27
March
M T W T F
2 3 4 5 6
9 10 11 12 13
16 17 18 19 20
23 24 25 26 27
30 31 1 2 3
|
|
| 9
Summary of Outreach from Existing Shareholders
Source: FactSet, Refinitiv, Investor Letters to Select Medical as of 19-Dec-25
¹ Based on letter claiming ownership of greater than 800,000 shares, based on 123.8mm shares outstanding. 2 Based on the letter Western Standard sent to Select’s Board of Directors.
Investor Date of
Outreach
Form of
Outreach Key Contact Current
Ownership
Year of Initial
Investment Cost Basis Commentary
Conan Laughlin
(Individual
Shareholder)
26-Nov-2025 Letter to Select
Board
Conan
Laughlin >0.6%1 2013 NA
Call to launch
accelerated stock
repurchase program for
at least $250mm at
$16.00 / share
T. Rowe Funds
(Mid-Cap | Small-Cap)
26-Nov-2025
Email to Joel
Veit, Treasurer
and SVP at
Select
Vincent
DeAugustino ~6.7% | ~1.3% 2010 | 2014 $11.29 | $12.86
Expressed desire to
share perspective with
Special Committee
Western
Standard 26-Nov-2025 Letter to Select
Board
Eric D.
Andersen ~1.3%2 2022 $13.20
DCF: $26.80 / share
Public Comps: $28.64 /
share (10.2x NTM EV /
EBITDA)
Historical: $23.89 /
share
(9.1x NTM EV /
EBITDA)
4
Important to engage with shareholders and understand their perspectives / concerns in a “listen only” context -
ask clarifying questions as appropriate on their assumptions and understand their thesis. Reinforce that the
Special Committee will run a thorough process to maximize value for Select’s shareholders. Do not share MNPI.
|
|
| 10
I Shareholder Base Analysis
A Appendix
|
|
| 11
Shareholder Base Analysis
Source: FactSet, Refinitiv, as of 19-Dec-25
Note: ¹ Quarter of the investors most recent position initiation in the security. Resets whenever the investor sells out completely. ² Calculated as the weighted average cost of current shares held
based on quarterly VWAPs and all share purchases from Q1 '05 - Q4 '25. 3 Based on share price at market close on 17-Dec-2025 ($15.01).
Cost Basis & Returns Most Recent Historical Positions (Shares in mm)
Fund
Refinitiv
Style AUM ($bn)Cost Basis¹
Unrealized
Gain² % OS
Shares
(mm) Q3 '25 Q2 '25 Q1 '25 Q4 '24 Q3 '24 Q2 '24 Q1 '24
T. Rowe Price Mid-Cap Value Value $14.3 $11.29 33.0 % 6.7 % 8.7 8.7 8.7 9.3 9.3 9.4 9.6 9.6
D. E. Shaw Hedge Fund 117.2 14.53 3.3 1.4 1.9 1.9 0.7 0.2 0.0 0.0 0.1 0.1
T. Rowe Price Small Cap Value Value 9.8 12.86 16.7 1.3 1.7 1.7 2.1 2.3 2.5 2.8 2.9 3.4
Millennium Mgm't Hedge Fund 123.5 14.20 5.7 1.2 1.6 1.6 0.3 1.7 0.3 0.0 0.7 0.2
Western Standard, LLC Hedge Fund 0.2 13.20 13.7 0.8 1.1 1.1
Prosight Capital Hedge Fund 0.5 14.10 6.5 0.7 0.9 0.9 0.4 0.0
BlackRock Advantage Small Cap Core Fund GARP 4.4 26.84 (44.1) 0.7 0.9 0.9 0.9 0.9 0.8 0.3 0.1
Hood River Small-Cap Growth Fund Growth 4.8 18.30 (18.0) 0.6 0.8 0.8 0.9 1.7 0.9 0.2 0.0
John Hancock Funds II Mid Value Fund Value 1.3 9.58 56.7 0.6 0.8 0.8 0.8 0.8 0.9 0.9 1.0 1.0
Vanguard Tax-Managed Small-Cap Fund Growth 9.3 13.36 12.4 0.6 0.7 0.7 0.7 0.7 0.7 0.7 0.8 0.8
DFA U.S. Targeted Value Portfolio Quantitative 14.0 11.27 33.2 0.5 0.6 0.6 0.6 0.5 0.5 0.6 0.6 0.6
DFA US Small Cap Portfolio Quantitative 17.4 10.22 46.9 0.5 0.6 0.6 0.7 0.8 0.9 1.0 1.0 1.0
Qube Research & Technologies Ltd Hedge Fund 71.0 13.20 13.7 0.4 0.6 0.6 0.0 0.2 0.3 0.1 0.1
DFA US Small Cap Value Portfolio Quantitative 17.0 13.31 12.8 0.4 0.6 0.6 0.0
Woodline Partners LP Hedge Fund 22.0 13.20 13.7 0.4 0.6 0.6 0.5 0.7 0.3
Strategic Advisers US Total Stock Fund Other 72.1 19.90 (24.6) 0.4 0.6 0.5 0.5 0.5 0.2 0.0
DFA Dimensional US Targeted Value ETF Quantitative 11.8 16.35 (8.2) 0.4 0.5 0.5 0.5 0.4 0.4 0.3 0.3 0.3
EA Bridgeway Omni Small-Cap Value ETF Value 1.8 20.82 (27.9) 0.4 0.5 0.4 0.5 0.6 0.3
ExodusPoint Capital Management, LP Hedge Fund 7.2 13.20 13.7 0.3 0.4 0.4 0.0
DFA U.S. Micro Cap Portfolio Quantitative 7.0 20.20 (25.7) 0.3 0.4 0.4 0.3 0.2 0.2 0.2 0.2 0.2
DFA Dimensional US Small Cap ETF Quantitative 11.8 17.54 (14.4) 0.3 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4
Citadel Advisors LLC Hedge Fund 125.2 15.42 (2.6) 0.3 0.4 0.4 0.5 0.5 0.1 0.0
John Hancock VIT - Mid Value Trust Value 0.6 8.91 68.5 0.3 0.3 0.3 0.3 0.4 0.4 0.4 0.4 0.4
Arrowstreet Capital, Limited Partnership Hedge Fund 165.1 28.59 (47.5) 0.2 0.3 0.3 0.5 0.5 0.7 0.8 0.7 0.8
Point72 Asset Management, L.P. Hedge Fund 45.3 25.39 (40.9) 0.2 0.3 0.3 0.2 1.4 1.7 2.1 0.8 0.3
Total 19.9 % 25.8 25.7 20.5 23.4 21.8 20.9 20.6 19.5
Median $14.10 6.5 %
Weighted Average³ $13.93 14.6 %
Parties that have reached out to Select since offer from consortium made public
|
|
| 12
II Preliminary Diligence Checklist
A Appendix
|
|
| 13
Select Medical Initial Diligence List (1/2)
Financial
1. Business and Segment Level Financials (5 Year forecast, including quarterlies if available, and last 3 years historicals)
2. Revenue, EBITDA and cash flow by:
a. Critical Illness Recovery Hospitals
b. Inpatient Rehabilitation Facilities
c. Outpatient rehabilitation
3. Volume v. rate assumptions by segment
a. CMS rule impact sensitivity analysis if available
4. Joint venture financials
a. Revenue, EBITDA and cash flow by customer and by segment
5. Labor
a. Labor expense by segment
b. Utilization of contract labor
c. Assumptions on wage growth throughout forecast period
6. Corporate expense details
a. Overview of what is directly linked to segment versus what is allocated / shared
b. Other operating expense detail (e.g., rent expense, G&A, etc.)
7. Variance in tax rate by segment (if applicable)
8. Same-store growth v. de novo / M&A contribution by segment
a. Overview of facility/bed expansion, de novos and M&A pipeline
9. Capital expenditures
a. Overview of maintenance v. growth capex
10. Other cash flow and net working capital drivers
11. Latest capitalization table
12. Overview of payments or rights that vest or are otherwise payable, accelerated or triggered in connection with a change of control
13. KPIs
a. Licensed beds by CIRH/ IRF
b. Average length of stay by segment
c. Occupancy by site
d. Visits per therapist
|
|
| 14
Select Medical Initial Diligence List (2/2)
Business
1. Payor mix
2. Employee Matters
a. Employee retention / turnover statistics
b. Joint venture employees v. FTE at Select
c. Overview of key management by segment
3. Overview of facility footprint (location, segment, type of facility, owned v. leased, key lease terms, CoC terms, etc.)
4. Overview of any non-disclosed litigation and/or government investigations
5. Summary of joint venture relationships and key terms by customer
6. Joint venture agreements (including any management, put/call and buyout agreements) and an ownership summary for each JV;
status of JV put/call options and minority partner buy-out rights
7. Current credit agreements and overview of key covenant terms / CoC provisions
8. Overview of estimated impact of OBBBA for each market
9. Summary of historical acquisitions and dispositions material to the business, including documents relating to any pending or
proposed merger, JV, acquisition or disposition
10. Overview of outstanding material litigation
Other
1. Overview of historical dialogue with potential strategic and sponsor buyers for both WholeCo or any particular segment
2. Previous Board Presentations
a. Management forecasts and sensitivity analysis
b. Separation or strategic alternative analysis
c. Analysis done on TSAs, intercompany or separation costs
d. Corporate expense allocation analysis
3. Overview of shareholder agreements
|
|
| 15
III Working Group List
A Appendix
|
|
| 16
Working Group List
Company / Address Business Phone
Stallion, Inc.
4714 Gettysburg Rd
Mechanicsburg, PA 17055
Tel: 717-972-1100
Special Committee
Daniel J. Thomas
Board Member
Email: Dan.Thomas@healthcarehighways.com
Katherine Davisson
Board Member
Email: krdavisson@yahoo.com
Jim Ely
Board Member
Email: jim.ely@pricap.com
Stallion Special Committee
|
|
| 17
Working Group List
Company / Address Business Phone
Goldman Sachs & Co. LLC
200 West Street
New York, New York 10282
Tel: 212-902-1000
Fax: 212-902-3000
Healthcare
Michael Rimland
Managing Director
Head of Healthcare Services
Asst./Sec: Julie Salter
Tel: 212-902-3844
Mob: 917-863-9617
Email: michael.rimland@gs.com
Tel: 917-343-1658
Email: Julie.salter@gs.com
Peter van der Goes
Managing Director
Co-Head of Healthcare and Head of Healthcare M&A
Asst./Sec: Lina Choi
Tel: 212-902-1943
Mob: 917-494-9370
Email: peter.vandergoes@gs.com
Tel: 212-357-2107
Email: lina.choi@gs.com
Jeff McCown
Managing Director
Asst./Sec: Alyssa Free
Tel: 212-357-2825
Mob: 815-514-5160
Email: jeff.mccown@gs.com
Tel: 212-934-0712
Email: Alyssa.free@gs.com
Jennifer Austin
Vice President
Asst./Sec: Maria Luevanos
Tel: 212-902-1100
Mob: 714-732-2035
Email: jennifer.austin@gs.com
Tel: 415-249-7260
Email: maria.luevanos@gs.com
Peter Braun
Associate
Asst./Sec: Sunny Morris
Tel: 212-855-0175
Mob: 651-955-3291
Email: peter.braun@gs.com
Tel: 312-384-3002
Email: sunny.morris@gs.com
Goldman Sachs
|
|
| 18
Company / Address Business Phone
Goldman Sachs & Co. LLC
200 West Street
New York, New York 10282
Tel: 212-902-1000
Fax: 212-902-3000
Healthcare (Cont’d)
Campbell Moriarty
Analyst
Asst./Sec: Erica Hayden
Tel: 212-855-0347
Mob: 973-494-1900
Email: campbell.moriarty@gs.com
Tel: 312-384-3381
Email: erica.hayden@gs.com
Ashton Rollins
Analyst
Asst./Sec: Keili Perez
Tel: 212-902-7669
Mob: 201-957-3449
Email: ashton.rollins@gs.com
Tel: 312-384-3098
Email: keili.perez@gs.com
Working Group List
Goldman Sachs
|
|
| 19
Company / Address Business Phone
Skadden, Arps, Slate, Meagher & Flom
One Manhattan West
New York, New York 10001
Tel: 212-735-3000
Fax: 212-735-2000
M&A
Allison Schneirov
Partner
Tel: 212-735-4138
Email: Allison.Schneirov@skadden.com
Christopher Barlow
Partner
Tel: 212-735-3972
Email: Christopher.Barlow@skadden.com
Jacob Allely
Associate
Tel: 212-735-2081
Email: Jacob.Allely@skadden.com
Sophie Minter
Associate
Tel: 212-735-3706
Email: Sophie.Minter@skadden.com
Litigation
Joe Larkin
Partner
Tel: 302-651-3124
Email: Joseph.Larkin@skadden.com
Working Group List
Skadden, Arps, Slate, Meagher & Flom
|
|
| 20
IV WCAS Diligence Workplan
A Appendix
|
|
| 21
WCAS Diligence Workplan
1 of 3
Topics Key Deliverables Resources
Core Business Diligence
IRF
◼ Fan of outcomes for revenue growth (same-facility and pipeline) and margin performance
◼ De-novo / JV pipeline review and validation, including certainty, ramp and contribution over N5Y, JV economics, capex, etc.
— Attractiveness of top opportunities (MSA-level IRF penetration, population growth, competitive dynamics, etc.)
— Historical pipeline conversion and win / loss trends
— Ramping / recently ramped facilities performance, including vs. expectations at time of development
— Typical de-novo unit economics, ramp, and payback under various JV / ownership structures
◼ Same-facility trending by volume (incl. bed utilization), rate, payor / case mix, and margins by geo and ownership structure (standalone vs. JV, consolidated vs.
unconsolidated)
— Benchmarking to MSA-level market growth
◼ Facility-level performance variation and benchmarking, including areas of optimization
◼ JV economics and contract structure review, including management fees, ownership, termination provisions, etc.
◼ Payor mix and rate benchmarking / outlook, by geo and top payors
◼ Cost base composition and trending by function, including fixed vs. variable, operating leverage, wage growth, attrition, etc.
◼ Capex review and trending, including maintenance / growth splits and de-novo by facility where relevant
◼ Whitespace analysis to analyze longer-term de-novo opportunity and growth outlook
◼ Referral mix and strength of relationships, including distinctions by ownership structure
— Discharge planner / referrer perspectives (via survey / calls)
◼ Quantifying regulatory impact - TEAM, CMS re-weight, non-complaint case rate change, short-stay home health transfers, etc.
◼ Bain
OP Rehab
◼ Fan of outcomes for revenue growth (same-clinic and pipeline) and margin performance, incl. impact of productivity / other operational initiatives
◼ Geo-level same-clinic trending on volume, rate, payor mix, labor productivity and profitability / margins by ownership structure
— Competitive positioning of large brands / JVs in key geos and implications on performance
◼ Clinic-level profitability and productivity benchmarking / trending, including portfolio optimization / rationalization opportunity
◼ Payor mix and rate benchmarking / outlook, by payor type, geo and ownership structure
— Improvement opportunity from converting wholly-owned clinics to JVs
— Commercial rate outlook
◼ Deep-dive on margin / productivity trending and improvement opportunities
— Cost trending at MSA/geo and JV / brand level (as relevant) by function, including fixed vs. variable, operating leverage, etc.
— Labor cost composition and trending by type of role (PT vs. back-office), including turnover, compensation (wage rates, bonuses, etc.), and contract labor usage
— Geo-specific dynamics (e.g. clinics per capita) and corresponding impact on labor costs / margins
— Incentives in place to drive PT productivity (e.g. productivity-linked bonuses)
— Financial impact of operational initiatives underway or identified to drive margin expansion (e.g. scheduling)
— Tech / AI enablement opportunity to drive productivity and cost efficiencies (coding / documentation, scheduling, etc.)
◼ JV economics and contract structure review
◼ De novo / acquisition pipeline, including expected ramp and contribution, capex etc.
— Ramping / recently ramped facilities performance, including vs. expectations at time of development
— Typical de-novo unit economics, ramp and payback on under various ownership structures
— Potential to be more aggressive around de-novos and complementary M&A to accelerate growth (given multiple uplift at re-IPO)
◼ Drivers and archetypes of clinic closures historically
◼ Cohort-level financial and unit economic (volume, rate, mix) trending for mature vs. ramping facilities
◼ Referral mix and strength of relationships, including distinctions by ownership structure
— Referrer perspectives (via survey / calls)
◼ Capex trending, including maintenance / growth splits
◼ Review of current tech stack, incl. ongoing initiatives and product roadmap; degree and quantification of optimization opps.
◼ Ops Consultant (Bain
/ other)
◼ PT SMEs
◼ WCAS OPs (Bill,
Lawrence, Annie,
Maureen)
|
|
| 22
WCAS Diligence Workplan
2 of 3
Topics Key Deliverables Resources
Core Business Diligence
LTACH
◼ Facility-level utilization, volume, rate, payor / case mix, and margin trending, by facility type (HiH vs freestanding), and ownership structure
◼ Deeper dive into LTACH regulatory dynamics, including impact of historical changes (site neutrality, outlier thresholds), likelihood of future reform, payor
perception across MA / commercial, and expected go-forward rate dynamics
◼ Impact of outlier threshold, 20% transmittal rule, and other regulatory considerations on financials / unit economics
◼ Unit economics and margins by compliant vs. non-compliant cases
◼ Cost base composition and trending
◼ JV economics and contract structure review
◼ Rate benchmarking and trending / outlook, by payor type and geo
◼ Light touch market work for top MSAs (growth outlook, competitive positioning, etc.)
◼ Capex trending and outlook
◼ Capstone
◼ Bain (light touch)
OP Rehab
◼ Detailed 2026 budget review
◼ Corporate G&A costs by functional area, including fixed / variable distinction and segment allocations
◼ Composition of Other segment revenue / costs
◼ Review of core functional areas, including RCM, IT, payor contracting, etc.; global vs. segment-specific functions and overlap
◼ Remaining obligations / economics related to Concentra spin, if any
◼ Procurement and supply chain processes / savings opportunity
◼ WCAS OPs (Bill, Lawrence,
Jeff)
Potential
LTACH Sale
/ Spin
◼ Structuring considerations (legal, accounting, tax, etc.)
◼ Preparation of pro forma RehabCo / LTACHCo financial statements, including disclosure requirements
◼ LTACH debt financing (quantum, rate, maximum capacity, impact of various FMVs to debt raise, etc.)
◼ Organizational design and operational entanglements, including any impact to multi-segment JVs
◼ Tax implications
◼ PwC
◼ R&G
Exit
◼ Segment-level disclosures required in S-1 (including in context of what public investors / analysts will expect) and ideal positioning, including buyside / equity
research perception
◼ Investor universe and appetite for RehabCo IPO; buyside perspectives
◼ Timing scenario analysis based on performance / de-leveraging
◼ Expected discount across IPO and block trades and timing from IPO to sell-down
◼ Expected fully distributed trading multiple range based on peer trading performance and benchmarking
◼ Barclays, WF, JPM
◼ [Specialist Buyside Advisory
Firm – e.g., Mainstay]
◼ Chris Solomon (WCAS Cap
Markets)
Other Diligence Workstreams
Tech ◼ Review of key tech systems including EHR, RCM, etc.; assess scalability and presence of tech debt / potential remediation costs
◼ Customary cybersecurity diligence ◼ PASG / WCAS Ops
Financial
Accounting /
Tax
◼ See Sale / Spin Feasibility above
◼ Customary QoE / QoR, NWC, accounting, and tax diligence
◼ Tax diligence around Concentra spin
◼ PwC
Debt
Financing
◼ Finalize quantum, rates, structure and documentation for incremental leverage
◼ Ratings agency process
◼ Interest coverage and leverage scenario analysis under various financial and interest rate scenarios
◼ Barclays, WF, JPM
◼ R&G
◼ Chris Solomon
Co-invest ◼ Develop co-investor outreach plan and materials to support diligence (opportunity overview, model, etc.) ◼ WCAS IR
|
|
| 23
WCAS Diligence Workplan
3 of 3
Topics Key Deliverables Resources
Confirmatory Diligence
Legal ◼ Customary legal diligence, transaction documentation ◼ R&G
HR ◼ Customary benefits and HR diligence ◼ Jeff Gallant, [PwC]
Insurance ◼ Customary insurance diligence ◼ [Lockton]
ESG ◼ Customary ESG diligence ◼ [Bridge House]
|
### EX-99.(C)(V) - EXHIBIT 99.(C)(V)
EX-99.(C)(V)
5
tm2611660d2_ex99-cv.htm
EXHIBIT 99.(C)(V)
Exhibit 99.(c)(v)
|
| Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Materials for the Special Committee
Goldman Sachs & Co. LLC
January 12th, 2026
Goldman Sachs does not provide accounting, tax, or legal advice. Notwithstanding anything in this document to the contrary, and except as required to enable
compliance with applicable securities law, you (and each of your employees, representatives, and other agents) may disclose to any and all persons the US
federal income and state tax treatment and tax structure of the transaction and all materials of any kind (including tax opinions and other tax analyses) that are
provided to you relating to such tax treatment and tax structure, without Goldman Sachs imposing any limitation of any kind.
|
|
| 1
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Today’s Discussion
2 Overview of Management Forecast
1 Public Market Perspectives on Select
3 Overview of Financial Analyses
A Appendix
4 Overview of Potential Strategic Alternatives
|
|
| 2
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
1 Public Market Perspectives on Select
|
|
| 3
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Source: FactSet, Market data as of 06-Jan-2026
1 Proposal received 24-Nov-2025 after market close; stock price reaction reflects following trading day.
Select Medical’s Share Price Performance
Date
1 Day
Reaction Event
21-Feb-2025 (7.2)%
◼ Reports Q4 2024 earnings, beating
revenue by 2.4% but missing EBITDA by
(0.2)% driven by (6.0)% YoY decrease in
LTACH Adj. EBITDA resulting from start-up losses, integration costs, and
Hurricane Helene
◼ 2025 EBITDA guidance established at
$520mm – $540mm (vs. $548mm
consensus)
02-May-2025 (21.8)%
◼ Reports Q1 2025 Earnings, missing
revenue by (3.0)% and EBITDA by
(7.4)%, driven by underperformance of
CIRH segment given decreasing YoY
quarterly EBITDA and contracting margin
◼ 2025 EBITDA guidance lowered to
$510mm – $530mm (vs. $530mm
consensus)
01-Aug-2025 (15.0)%
◼ Reports Q2 2025 earnings, missing
revenue by (0.1)% and missing EBITDA
by (0.7)%, driven by high-cost outlier
thresholds in CIRH and pending
implementation of the 20% transmittal
rule
◼ 2025 Net Income guidance lowered to
$141mm – $154mm (vs. $178mm
consensus)
08-Oct-2025 9.2 %
◼ RBC increases price target from $16 to
$20, maintains “outperform”, cites CMS’
decision to delay implementation of 20%
transmittal rule, and notes attractive
entry valuation
31-Oct-2025 (2.6)%
◼ Reports Q3 2025 earnings, beating
revenue by 2.3% and missing EBITDA
by (1.9)%, driven by heightened labor
costs coupled with unfavorable payer mix
◼ 2025 Net Income guidance increased
slightly to $143mm – $156mm (vs.
$184mm consensus)
25-Nov-20251
11.1 %
◼ Acknowledges receipt of non-binding
proposal from Executive Chairman
Robert Ortenzio to acquire all
outstanding shares for $16.00 to $16.20
per share in cash (the “Proposal”)
good
good
good
good
check
good
good
good
$ 5
$ 10
$ 15
$ 20
$ 25
Jan-2025 Apr-2025 Jul-2025 Oct-2025 Jan-2026
Share Price
$ 15.38
1Y Average: $ 15.29
6M Average: $ 13.74
52-Week High: $20.83
52-Week Low: $ 11.77
SEM Price as of 24-Nov-25: $14.01
SEM Price as of 25-Nov-25: $15.57
1
2
5
3
4
6
1
2
3
4
5
6
Stock Price Performance Over the Last Year
|
|
| 4
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
5.0 x
10.0 x
15.0 x
20.0 x
25.0 x
30.0 x
35.0 x
Jan-2025 May-2025 Sep-2025 Jan-2026
9.7 x
6.6 x
15.7 x
7.1 x
14.5 x
Source: FactSet; Market data as of 06-Jan-2026
Note: Acute Care Peers include Community Health Systems, Tenet Healthcare, Universal Health Services. Alternative Site Healthcare Peers include RadNet, USPH, Surgery Partners, and BrightSpring.
NTM EV / EBITDA | Last 5 Years
Select Medical’s NTM Valuation Multiple Over Time
Relative to Peers
03-Jan-2024
Select announces its intention to
spin off Concentra; stock has
traded up 42.0% and multiple has
traded up by 1.4x since then
Backup
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Analysis\Excel\NTM EV EBITDA_vMaster.xlsx
Select’s NTM EV / EBITDA
pro forma for Concentra
Separation: ~7.5x
SEM NTM EV / EBITDA
24-Nov-25: 6.3 x
25-Nov-25: 6.7 x
NTM EV / EBITDA | Last 1 Year
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7.2 x
10.4 x
14.7 x
WIP
Implied ex-Concentra Select Medical 5-year, 3-year, and 2-year average NTM EV / EBITDA
Multiples of 7.9x, 7.8x, and 7.5x respectively, assuming Concentra valued at 9.5x NTM EBITDA
|
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Confidential, Preliminary & Highly Illustrative for Discussion Purposes
$ 21.00 $ 20.00 $ 20.00
$ 17.00
$ 14.00
Benchmark RBC DB Mizuho UBS
Median: $20.00
Price as of 06-Jan-26: $15.38
Median Sellside Broker Target Price Implies ~30%
Upside to Select’s Current Trading Levels
($ in millions, except per share values)
Price Target
Source: Wall Street Research, FactSet as of 06-Jan-2026
Date 25-Nov-2025 24-Nov-2025 25-Nov-2025 25-Nov-2025 25-Nov-2025
Methodology
2026 EV / EBITDA
& SOTP ($28 per
share)
SOTP Analysis - 2026 EV / EBITDA 2026 EV / EBITDA -
NCI
2026E EBITDA $ 567 $ 532 $ 542 $ 550 $ 555
Multiple 8.3 x
CIRH & OP: 7.0x
2026 EV / EBITDA
IRF: 10.0x 2026 EV /
EBITDA
- 7.0 x 9.0 x
Buy
Hold
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EBITDA Metrics
2025E Guidance:
$510mm - $530mm
2026E Mgmt. Projection:
$531mm
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Confidential, Preliminary & Highly Illustrative for Discussion Purposes
7.8 % 8.2 % 8.5 % 8.6 %
4.0 %
12.2 %
Source: Select Medical Management Projections as of 30-Dec-2025 (“Management Projections”), FactSet as of 06-Jan-25
1 As of unaffected date of 24-Nov-2025. 2 Acute Care Peers include Community Health Systems, Tenet Healthcare, and Universal Health Services. 3 Alternative Site Healthcare includes RadNet,
USPH, Surgery Partners, and BrightSpring.
2025E – 2027E Revenue CAGR
2025E – 2027E EBITDA CAGR
2026E EBITDA Margin
Consensus1
Framing Select Medical’s Public Comparable Universe
Management
Acute Care
Peers2
Alternative Site
Healthcare3
Consensus1 Management
Acute Care
Peers2
Alternative Site
Healthcare3
Consensus1 Management
Acute Care
Peers2
Alternative Site
Healthcare3
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9.8 % 9.3 %
21.0 %
12.5 % 14.8 % 14.1 %
4.6 % 5.1 %
8.4 % 5.9 % 5.0 %
9.4 %
2026E EV / EBITDA
Consensus1 Management
Acute Care
Peers2
Alternative Site
Healthcare3
6.3 x
NA
10.4 x
15.7 x
7.2 x
14.7 x
|
|
| 7
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
2 Overview of Management Forecast
|
|
| 8
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Preliminary
Perspectives on
Management Outlook
◼ Management Projections currently slightly behind Street in 2026 while more in-line by 2027
— Analyst price targets last updated in November reference 2026E EBITDA for valuation, which are higher than management projections of
($532-567mm vs. $531mm)
– Potential for price targets to come down once 2026E revenue and EBITDA guidance provided at Q4 2025 earnings in February 2026
◼ Management Projections for total revenue in-line with Street estimates for 2025E and slightly ahead for 2026-2027E
— Outperformance driven by the OP segment in 2026-2027E
— Forecast assumes 20 net new clinics per year, 2% increase in net patient revenue per visit and 3% increase in visits per day
◼ Management Projections for adj. EBITDA below Street estimates in 2025E and 2026E, with 2025E adj. EBITDA of $510mm at low end of
previously issued guidance of $510-530mm
— Underperformance relative to consensus primarily driven by Inpatient Rehab, partially offset by Outpatient
– Forecast for Inpatient adj. EBITDA in 2026-2027E includes development costs related to new hospitals
Perspectives on Key
Drivers of Forecast
◼ CIRH margins expected to grow throughout forecast period (10.3% in 2025 increasing to 11.1% by 2030) per Select Medical Management
— This compares to historical EBITDA margins of 5.0 – 12.3% between 2022 and 2024
◼ IRF rate outlook remains steady at ~2% growth p.a. in 2027 – 2030
◼ OP margins another area of significant improvement (8.7% in 2025 increasing to 12.3% by 2030) relative to the historical margin of ~8-9%
— OP assumes 3% increase in visits per day which drives a significant portion of margin improvement throughout the forecast period
Preliminary
Perspectives on
Outlook by Segment
◼ Select has a slightly different financial profile relative to most relevant trading comparables for Inpatient (Encompass) and Outpatient (USPH)
◼ While investors may reference these peers in thinking about sum-of-the-parts valuation, they may apply a discount to those direct peers
Source: Management Projections, FactSet as of 06-Jan-26
Note: Segment level EBITDA Margin with corporate expenses allocated by segment EBITDA contribution are 14.6% and 6.6% for IRF and OP, respectively, per Select Medical Management
Summary Observations on Management Projections
Home Health
Revenue
Volume Growth:
— Episodic admissions expected to decline at a low single digit rate throughout the projection period as Medicare-eligible
population continues to shift to Medicare Advantage
— Majority of current revenue (66% in YTD 2023) contributed by Medicare FFS
— Non-episodic visits expected to continue to grow at a double-digit growth rate as MA population is expected to increase
Revenue Growth:
— Episodic revenue to remain under pressure in 2024E due to the CMS proposed rate decrease of (2.2)%
into (1.8)% for Enhabit); beyond 2024E, rates expected to increase at long-term inflation target of 2%
— Management forecast does not yet reflect most recent CMS rate increase of +0.8% for 2024 (expected to
translate into +1.2% for Enhabit)
— Non-episodic revenue per visit expected to improve driven by the Company’s Payor Innovation initiative
Cost Per Visit Growth: In 2024E-efficiency gains; in 2024E, includes contract labor initiative starting mid-2023 with a (0.7)% impact
Hospice
Revenue
Admissions: Anticipated growth in-line with long-term market growth of hospice in the US of 5.5%
Revenue per Patient Day: Rate expected to improve 2.6% in 2024E based on final rule of 2.8%1
; beyond 2024E, rate expected
to increase at long-term inflation target of 2%
Cost per Patient Day Growth: in 2024E and 2025E, expect increased census with no additional labor costs from transition to
case management model; in 2026E and 2027E, expect annual 3% increase due to inflation partially offset by 0.5% efficiency
gains
Other
Corporate G&A: Expected to grow faster than revenue in 2023E as the company continues to build out corporate functions
— Expect Pre-Corp SG&A growth to be 50% of revenue growth for the Home Health and Hospice Segments in 2024E onwards
Maintenance capex as a % of revenue expected to remain at ~0.8% of Revenue
Expects to open 10 De Novo locations per year (2 Home Health / 8 Hospice) starting in 2023E
Projections do not include additional acquisition spend other than one acquisition that closed in Q1 2023A
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Charts at Bottom
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Top portion (for the fill in the blank from jeff)
IRF
IRF
OP
OP
8.9%
21.5%
8.4%
21.0%
'25E to '27E Rev CAGR '26E EBITDA Margin
5.0%
8.8%
5.9%
12.5%
'25E to '27E Rev CAGR '26E EBITDA Margin
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Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Source: Management Projections
Note: Personnel expense margin and facility expense margin is defined as personal expense or facility expense divided by revenue
Key Assumptions Underlying Management
Projections
Critical Illness
Recovery Hospitals
(“CIRH”)
~45% of ’25E Revenue
◼ Volume: Assumes 3.3% growth in 2026 trending down to 0.7% in 2030
◼ Rate: Assumes (1.0)% growth in 2026 (driven by implementation of 20% transmittal rule) trending up to 2.0% in 2030
◼ Facility Expense: 2.1% growth in 2026 trending up to 2.7% in 2030
Inpatient
Rehabilitation
Facilities
(“IRF”)
~24% of ’25E Revenue
◼ Volume: Assumes 10.9% growth in 2026 trending down to 0.2% in 2030
◼ Rate: Assumes (1.9)% growth in 2026 trending up to 2.0% in 2030
◼ New Business Development: Pipeline and developments contributes 630bps to the 2028 revenue growth rate, trending down to
503bps in 2030-onward
◼ Facility Expense: 3.5% growth in 2026 trending up to 10.6% in 2030
Outpatient
(“OP”)
~24% of ’25E Revenue
◼ Volume: Assumes 4.1% growth in 2026 trending up to 4.4% in 2030
◼ Rate: Assumes 0.8% growth in 2026 trending up to 2.0% in 2030
◼ New Business Development: Pipeline and development contributes 50bps to the 2028 revenue growth rate, and contributes
~50bps to annual revenue growth thereafter
◼ Facility Expense: 2.4% growth in 2026 trending down to 2.0% in 2030
Corporate
& Cash Flow
◼ Corporate expenses expected to grow by 12% in 2026E and 3% thereafter per Select Medical Management
◼ Capital Expenditures are allocated to each segment and represents ~2.5 – 4.0% of revenue throughout the forecast period
◼ Change in NWC represents a 5.5% - 8.8% of change in revenue and is allocated to each segment throughout the forecast period
◼ Projections exclude any impact of additional M&A or de novo spend beyond what is outlined above
◼ Marginal tax rate of 21%
Joint Venture
Assumptions
◼ Joint ventures that are majority owned are consolidated in the financial forecast and NCI is allocated to each segment
◼ Joint ventures that are minority owned are not consolidated in the financial forecast, but cash flow distributions are included as part
of NCI
— Corporate revenue represents services provided to partners at cost
Home Health
Revenue
Volume Growth:
— Episodic admissions expected to decline at a low single digit rate throughout the projection period as Medicare-eligible
population continues to shift to Medicare Advantage
— Majority of current revenue (66% in YTD 2023) contributed by Medicare FFS
— Non-episodic visits expected to continue to grow at a double-digit growth rate as MA population is expected to increase
Revenue Growth:
— Episodic revenue to remain under pressure in 2024E due to the CMS proposed rate decrease of (2.2)%
into (1.8)% for Enhabit); beyond 2024E, rates expected to increase at long-term inflation target of 2%
— Management forecast does not yet reflect most recent CMS rate increase of +0.8% for 2024 (expected to
translate into +1.2% for Enhabit)
— Non-episodic revenue per visit expected to improve driven by the Company’s Payor Innovation initiative
Cost Per Visit Growth: In 2024E-efficiency gains; in 2024E, includes contract labor initiative starting mid-2023 with a (0.7)% impact
Hospice
Revenue
Admissions: Anticipated growth in-line with long-term market growth of hospice in the US of 5.5%
Revenue per Patient Day: Rate expected to improve 2.6% in 2024E based on final rule of 2.8%1
; beyond 2024E, rate expected
to increase at long-term inflation target of 2%
Cost per Patient Day Growth: in 2024E and 2025E, expect increased census with no additional labor costs from transition to
case management model; in 2026E and 2027E, expect annual 3% increase due to inflation partially offset by 0.5% efficiency
gains
Other
Corporate G&A: Expected to grow faster than revenue in 2023E as the company continues to build out corporate functions
— Expect Pre-Corp SG&A growth to be 50% of revenue growth for the Home Health and Hospice Segments in 2024E onwards
Maintenance capex as a % of revenue expected to remain at ~0.8% of Revenue
Expects to open 10 De Novo locations per year (2 Home Health / 8 Hospice) starting in 2023E
Projections do not include additional acquisition spend other than one acquisition that closed in Q1 2023A
For inpatient -
rate = net patient revenue per day
volume = patient days
For outpatient -
rate = net patient revenue per visit
volume = total clinic visits
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Key Assumptions sheet
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Confidential, Preliminary & Highly Illustrative for Discussion Purposes
$ 2,300 $ 2,444 $ 2,451 $ 2,506 $ 2,577 $ 2,655 $ 2,719 $ 2,792
$ 980
$ 1,189
$ 1,111 $ 1,290 $ 1,402 $ 1,531 $ 1,664 $ 1,783 $ 1,912
$ 1,250 $ 1,298 $ 1,358 $ 1,430 $ 1,510 $ 1,603 $ 1,700
$ 358 $ 382 $ 397 $ 457 $ 469 $ 483 $ 497 $ 512
$ 4,826 $ 5,187 $ 5,437 $ 5,722 $ 6,007 $ 6,312 $ 6,602 $ 6,916
2023A 2024A 2025E 2026E 2027E 2028E 2029E 2030E
$ 246 $ 302 $ 253 $ 256 $ 269 $ 283 $ 296 $ 311
$ 222 $ 246 $ 285 $ 301 $ 337 $ 375 $ 410 $ 112 $ 445
$ 109 $ 113 $ 120 $ 141 $ 160 $ 183 $ 209
$(134) $(146) $(140) $(146) $(150) $(154) $(159) $(163)
$ 446
$ 510 $ 510 $ 531
$ 597
$ 664
$ 730 $ 801
2023A 2024A 2025E 2026E 2027E 2028E 2029E 2030E
Source: Management Projections; Select Medical public filings
Revenue
WholeCo Growth - 7.5 % 4.8 % 5.2 % 5.0 % 5.1 % 4.6 % 4.8 %
CIRH Growth - 6.3 % 0.3 % 2.2 % 2.9 % 3.0 % 2.4 % 2.7 %
IRF Growth - 13.4 % 16.2 % 8.7 % 9.2 % 8.7 % 7.1 % 7.2 %
OP Growth - 5.2 % 3.8 % 4.6 % 5.3 % 5.6 % 6.1 % 6.0 %
Corporate Growth - 6.8 % 4.0 % 14.9 % 2.6 % 3.0 % 3.0 % 3.0 %
5.5 %
2025E – 2030E
CAGR
Adjusted
EBITDA
Select Medical’s Historical and Projected Financials
Management Projections | ($ in millions)
OP
2.6 %
WholeCo Growth - 14.4 % (0.1)% 4.0 % 12.5 % 11.3 % 9.8 % 9.7 %
WholeCo Margin 9.2 % 9.8 % 9.4 % 9.3 % 9.9 % 10.5 % 11.1 % 11.6 %
CIRH Margin 10.7 % 12.3 % 10.3 % 10.2 % 10.4 % 10.7 % 10.9 % 11.1 %
IRF Margin 22.6 % 22.1 % 22.1 % 21.5 % 22.0 % 22.5 % 23.0 % 23.3 %
OP Margin 9.4 % 8.7 % 8.7 % 8.8 % 9.9 % 10.6 % 11.4 % 12.3 %
Corporate Margin (37.4)% (38.1)% (35.3)% (32.0)% (32.0)% (32.0)% (31.9)% (31.9)%
8.2 %
2025E – 2030E
CAGR
CIRH IRF
5.2 %
4.9 %
Corporate
13.2 %
4.2%
9.3 %
9.4 %
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3.1 %
|
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| 11
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
$ 513
$ 550
$ 596
$ 510 $ 510
$ 531
$ 597
$ 500
$ 520
$ 540
$ 560
$ 580
$ 600
$ 620
$ 640
2024A 2025E 2026E 2027E
$ 5,416
$ 5,638
$ 5,923
$ 5,187
$ 5,437
$ 5,722
$ 6,007
$ 5,000
$ 5,200
$ 5,400
$ 5,600
$ 5,800
$ 6,000
$ 6,200
2024A 2025E 2026E 2027E
Total Revenue
Source: Management Projections, Wall Street research as of 06-Jan-2026, Select Medical public filings
Growth (%)
Management Projections
7.5 %
4.8 % 5.2 % 5.0 %
Analyst Consensus 4.4 % 4.1 % 5.0 %
# of Analysts 5 5 4
Management Projections vs. Analyst Consensus
($ in millions)
Adj. EBITDA
Margin (%)
9.8 %
9.4 % 9.3 % 9.9 %
9.5 % 9.8 % 10.1 %
5 5 4
2025E - 2027E CAGR
Management Projections 5.1 %
Consensus 4.6 %
2025E - 2027E CAGR
Management Projections 8.2 %
Consensus 7.8 %
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Growth (%)
[ ] % [ ] % [ ] %
Consensus 4.5 % 4.1 % 4.4 %
4 4 3
Margin (%)
9.8 %
[ ] % [ ] % [ ] %
9.5 % 9.7 % 10.1 %
4 4 3
Current 2025E Guidance:
$510mm to $530mm
|
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| 12
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
$ 1,285
$ 1,407
$ 1,535
$ 1,111
$ 1,290 $ 1,402
$ 1,531
$ 800
$ 1,000
$ 1,200
$ 1,400
$ 1,600
$ 1,800
$ 2,000
2024A 2025E 2026E 2027E
$ 1,286
$ 1,322
$ 1,371 $ 1,250
$ 1,298
$ 1,358
$ 1,430
$ 800
$ 1,000
$ 1,200
$ 1,400
$ 1,600
$ 1,800
$ 2,000
2024A 2025E 2026E 2027E
$ 2,448
$ 2,484
$ 2,444 $ 2,451 $ 2,563
$ 2,506
$ 2,577
$ 1,600
$ 1,800
$ 2,000
$ 2,200
$ 2,400
$ 2,600
$ 2,800
2024A 2025E 2026E 2027E
Source: Management Projections, Wall Street research as of 06-Jan-2026, Select Medical public filings
Growth (%)
Management Proj.
6.3 %
0.3 % 2.2 % 2.9 %
Analyst Consensus 0.2 % 1.5 % 3.2 %
# of Analysts 3 3 2
Management Projections vs. Analyst Consensus
($ in millions)
Outpatient Revenue
2025E - 2027E CAGR
Management Projections 2.5 %
Consensus 2.3 %
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CIRH Revenue Inpatient Rehab Revenue
2025E - 2027E CAGR
Management Projections 8.9 %
Consensus 9.3 %
2025E - 2027E CAGR
Management Projections 5.0 %
Consensus 3.2 %
13.4 %
16.2 % 8.7 % 9.2 %
15.7 % 9.5 % 9.0 %
3 3 2
5.2 %
3.8 % 4.6 % 5.3 %
2.9 % 2.8 % 3.7 %
3 3 2
|
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| 13
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
$ 257 $ 257
$ 258
$ 302
$ 253 $ 256
$ 269
$ 200
$ 220
$ 240
$ 260
$ 280
$ 300
$ 320
$ 340
$ 360
$ 380
$ 400
2024A 2025E 2026E 2027E
$ 283
$ 324
$ 363
$ 246
$ 285
$ 301
$ 337
$ 200
$ 220
$ 240
$ 260
$ 280
$ 300
$ 320
$ 340
$ 360
$ 380
$ 400
2024A 2025E 2026E 2027E
$ 105 $ 111 $ 112
$ 109 $ 113
$ 120
$ 141
$ 80
$ 100
$ 120
$ 140
$ 160
$ 180
$ 200
$ 220
$ 240
$ 260
$ 280
2024A 2025E 2026E 2027E
Source: Management Projections, Wall Street research as of 06-Jan-2026, Select Medical public filings
Margin (%)
Management Proj.
12.3 %
10.3 % 10.2 % 10.4 %
Analyst
Consensus 10.5 % 10.3 % 10.1 %
# of Analysts - 2 2 1
Management Projections vs. Analyst Consensus
($ in millions)
Outpatient EBITDA
2025E - 2027E CAGR
Management Projections 3.1 %
Consensus 0.3 %
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CIRH EBITDA Inpatient Rehab EBITDA
2025E - 2027E CAGR
Management Projections 8.7 %
Consensus 13.2 %
2025E - 2027E CAGR
Management Projections 11.9 %
Consensus 3.5 %
22.1 %
22.1 % 21.5 % 22.0 %
22.0 % 23.0 % 23.6 %
- 2 2 1
8.7 %
8.7 % 8.8 % 9.9 %
8.1 % 8.4 % 8.2 %
- 2 2 1
|
|
| 14
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
3 Overview of Financial Analyses
|
|
| 15
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Source: Management Projections, Select Medical public filings
Select
Medical
Management
Forecast
Income
Statement
◼ Total top-line CAGR of 4.9% from 2025E-2030E, annual growth tapers to 2.0% by 2035E
◼ 220bps of EBITDA margin expansion from 2025E-2030E, margin tapers by 70bps by 2035E
◼ Key longer-term assumptions
— Revenue growth
– CIRH: increases from 0.3% in 2025E to 2.7% in 2030E, tapers to 2.0% by 2035E
– IRF: decreases from 16.2% in 2025E to 7.2% in 2030E, tapers to 2.0% by 2035E
– OP: increases from 3.8% in 2025E to 6.0% in 2030E, tapers to 2.0% by 2035E
— EBITDA margin
– CIRH: increases from 10.3% in 2025E to 11.1% in 2030E, tapers to 10.6% by 2035E
– IRF: increases from 22.1% in 2025E to 23.3% in 2030E, tapers to 22.4% by 2035E
– OP: increase from 8.7% in 2025E to 12.3% in 2030E, tapers to 10.3% by 2035E
— D&A steps down from 2.6% in 2025E to 2.2% of revenue by 2030E-onward
Key Cash
Flow Items
◼ Change in net working capital as % of change in revenue increases from 5.5% in 2025E to 8.8% in 2030E-onward
◼ Assumes no additional M&A spend
◼ Capital expenditures decrease from $215mm in 2025E to $175mm in 2027E-onward
Balance Sheet ◼ Cash and cash equivalents of $60mm as of 30-Sep-2025 per Select Medical Management
◼ Total debt of $1,780mm as of 30-Sep-2025 per Select Medical public filings
Share Count ◼ Common share count of 120.5mm as of 30-Sep-2025 per Select Medical Management
◼ Restricted share count of 3.0mm as of 30-Sep-2025 per Select Medical Management
Financial / Modeling
Assumptions
◼ Marginal tax rate of 21%
◼ WACC: 10.0% – 12.0% | Perpetuity Growth Rate: 1.5 – 2.5%
◼ Discounting to 30-Sep-2025 using mid-year convention
Overview of Key Financial Assumptions
|
|
| 16
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
$ 14.86
$ 13.72
$ 11.40
$ 17.23
$ 12.26
$ 11.77
$ 14.00
$ 25.01
$ 25.11
$ 31.82
$ 19.05
$ 18.69
$ 20.83
$ 21.00
Summary of Illustrative & Preliminary Financial
Analyses
Discounted
Cash Flow
Analysis
Management
Projections
◼ 10-Year DCF discounted to 30-Sep-2025
◼ 10.0% – 12.0% WACC
◼ 1.5% – 2.5% perpetuity growth rate
◼ Cash of $60mm per Select Medical Management
◼ Total debt of $1,780mm per Select Medical public filings
Present Value
of Future
Stock Price
Management
Projections
◼ 6.0x – 8.0x NTM EV / EBITDA
◼ Cost of equity: 12.1%
Precedent
Transactions
Analysis
Precedent
Healthcare
Transactions
◼ EBITDA range: 6.2x – 11.2x based on inpatient rehabilitation and long-term acute
care precedent transactions since 2009
◼ LTM adjusted EBITDA of $505mm as of 30-Sep-2025 per Select Medical
Management
◼ Cash of $60mm per Select Medical Management
◼ Total debt of $1,780mm per Select Medical public filings
Premia Paid
Analysis
Premium to
Undisturbed
Price
◼ U.S. healthcare M&A transactions from $1 – $5bn in enterprise value since 2021,
cash-only
◼ 23% - 36% premia to undisturbed price (represents 25th to 75th percentile)
LBO
Analysis
Management
Projections
◼ 30-Sep-2025 transaction date
◼ 20.0% - 25.0% required IRR; 4.0x max leverage
◼ 6.5 x – 8.0 x LTM exit multiple
Public Market
Perspectives
52-Week High
and Low
◼ 52-week low: 01-Aug-2025
◼ 52-week high: 27-Jan-2025
Forward Analyst
Price Targets
◼ Median: $20.00 per share
◼ Based on 5 analyst price targets
Methodology Equity Value per Share Comments
Proposal: $ 16.00 - $16.20
A
B
D
E
Source: Management Projections, Select Medical public filings, Market data as of 06-Jan-2026
($ in millions, except per share data)
F
C
For Reference
oPV of FSP should be 15.20 – 22.28
The orange bubble should be undisturbed price of $14.01on page 19
oAdd a bullet the forward PTs which says CY2026E Consensus Median
EBITDA is [ ]% above current Management estimates
oLBO: Run the exit multiples at 6.5x – 8.0x with 7.25x at the midpoint
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| 17
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Source: Management Projections
Note: Cash flows are discounted to 30-Sep-2025 using mid-year convention; assumes cash of $60mm per Select Medical management, debt of $1,780mm per Select Medical public filings, fully
diluted share count of 123.5mm shares consisting of 120.5mm basic shares outstanding and 3.0mm RSUs per Select Medical Management. 2025E figures equal to sum of Q1 – Q3 2025A plus
Q4 2025E figures. 1 Per Select Medical Management.
Discounted Cash Flow Analysis
($ in millions, except per share data) | Valuation as of 30-Sep-2025
A
Management Projections
Terminal
Value
$in millions 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E 2034E 2035E
Total Revenue $5,437 $5,722 $6,007 $6,312 $6,602 $6,916 $ 7,209 $ 7,475 $ 7,710 $ 7,908 $ 8,066 $ 8,066
% Growth 4.8 % 5.2 % 5.0 % 5.1 % 4.6 % 4.8 % 4.2 % 3.7 % 3.1 % 2.6 % 2.0 %
Adj. EBITDA $ 510 $ 531 $ 597 $ 664 $ 730 $ 801 $ 828 $ 848 $ 863 $ 871 $ 876 $ 876
% Margin 9.4 % 9.3 % 9.9 % 10.5 % 11.1 % 11.6 % 11.5 % 11.4 % 11.2 % 11.0 % 10.9 % 10.9 %
(-) Stock-Based Compensation (18) (21) (23) (25) (28) (31) (31) (31) (31) (31) (31) (31)
EBITDA $ 492 $ 510 $ 574 $ 639 $ 702 $ 770 $ 797 $ 818 $ 832 $ 840 $ 845 $ 845
% Margin 9.0 % 8.9 % 9.6 % 10.1 % 10.6 % 11.1 % 11.1 % 10.9 % 10.8 % 10.6 % 10.5 % 10.5 %
(-) Depreciation & Amortization (142) (146) (150) (150) (150) (150) (150) (150) (150) (150) (150) (166)
% of Revenue 2.6 % 2.6 % 2.5 % 2.4 % 2.3 % 2.2 % 2.1 % 2.0 % 2.0 % 1.9 % 1.9 % 2.1 %
EBIT $ 350 $ 363 $ 423 $ 489 $ 551 $ 620 $ 646 $ 667 $ 682 $ 689 $ 694 $ 678
% Margin 6.4 % 6.4 % 7.0 % 7.7 % 8.4 % 9.0 % 9.0 % 8.9 % 8.8 % 8.7 % 8.6 % 8.4 %
(-) Taxes (73) (76) (89) (103) (116) (130) (136) (140) (143) (145) (146) (142)
% Tax Rate1 21% 21% 21% 21% 21% 21% 21% 21% 21% 21% 21% 21%
NOPAT $ 276 $ 287 $ 334 $ 386 $ 436 $ 489 $ 511 $ 527 $ 539 $ 545 $ 548 $ 536
% Margin 5.1 % 5.0 % 5.6 % 6.1 % 6.6 % 7.1 % 7.1 % 7.1 % 7.0 % 6.9 % 6.8 % 6.6 %
(+) Distributions from Unconsolidated Subsidiaries 56 55 58 59 61 63 66 68 70 72 73 73
(-) Distribution to and Purchases of Non-Controlling Interests (67) (78) (81) (83) (86) (88) (92) (95) (98) (101) (103) (103)
(+) Depreciation and Amortization 142 146 150 150 150 150 150 150 150 150 150 166
(-) Change in NWC (14) (15) (19) (25) (27) (28) (26) (23) (21) (17) (14) (14)
(-) Capital Expenditures (215) (237) (175) (175) (175) (175) (175) (175) (175) (175) (175) (175)
Unlevered Free Cash Flow $ 178 $ 157 $ 268 $ 313 $ 360 $ 412 $ 434 $ 452 $ 465 $ 474 $ 480 $ 484
Implied Equity Value per Share
Perpetuity Growth Rate
20.4 x 1.5% 2.0% 2.5%
WACC
10.0% $ 22.34 $ 23.59 $ 25.01
11.0% $ 18.19 $ 19.11 $ 20.14
12.0% $ 14.86 $ 15.55 $ 16.31
Implied Terminal LTM EBITDA Multiple
Perpetuity Growth Rate
6.6 x 1.5% 2.0% 2.5%
WACC
10.0% 6.9 x 7.4 x 7.9 x
11.0% 6.2 x 6.6 x 7.0 x
12.0% 5.7 x 6.0 x 6.3 x
Implied Terminal Value as % of EV
Perpetuity Growth Rate
0.7 % 1.5% 2.0% 2.5%
WACC
10.0% 50.9 % 52.6 % 54.3 %
11.0% 47.1 % 48.6 % 50.1 %
12.0% 43.6 % 44.9 % 46.3 %
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|
| 18
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
CIRH
Rate
Remains flat at 2026
growth of (1.0)% per
annum
Increases from (1.0)% to 2.0%
growth between 2026 and 2030,
2.0% from 2030-onward
+1 %
Volume
Assumes 0.0% growth in
patient days per annum in
2026 onward
Decreases from 3.3% to 0.7% growth
between 2026 and 2030, 0.7% from
2030-onward
+1 %
EBITDA
Margin
Remains flat at 2027
margin of 10.4% in
subsequent years
Increases from 10.2% to 11.1%
between 2026 and 2030, tapers to
10.6% by 2035E
+1 %
IRF
Rate (1)%
Increases from (1.9)% to 2.0%
growth between 2026 and 2030,
2.0% from 2030-onward
+1 %
Volume (1)%
Decreases from 10.9% to 0.2%
growth between 2026 and 2030,
0.2% from 2030-onward
+1 %
EBITDA
Margin (1)%
Increases from 21.5% to 23.3%
between 2026 and 2030, tapers to
22.4% by 2035E
+1 %
OP
Rate Remains flat at 2026
growth of 0.8% per annum
Increases from 0.8% to 2.0% growth
between 2026 and 2030. 2.0% from
2030-onward
+1 %
Volume
Assumes 0.0% growth in
patient days per annum in
2026 onward
Increases from 4.1% to 4.4% growth
between 2026 and 2030, 4.4% from
2030-onward
+1 %
EBITDA
Margin
Remains flat at 2027
margin of 9.9% in
subsequent years
Increases from 8.8% to 12.3%
between 2026 and 2030, tapers to
10.3% by 2035E
+1 %
WholeCo
Revenue
Growth (1)%
Decreases from 5.2% to 4.8% growth
between 2026 and 2030, annual
growth tapers to 2.0% by 2035E
+1 %
EBITDA
Margin (1)%
Increases from 9.3% to 11.6%
between 2026 and 2030, tapers to
10.9% by 2035E
+1 %
DCF
Assumptions
PGR (0.5)% 2.0% +0.5 %
WACC +1.0 % 11.0 % (1.0)%
Source: Management Projections
Note: Downside and upside flex values apply equally to each year in base case scenario unless otherwise noted.
Sensitivity Upside Case Equity Value per Share Sensitivity
Discounted Cash Flow Sensitivity
($ in millions, except per share data) | Base Case of $19.11 Per Share
A
Downside Case Base Case
$(1.65)
$(1.02)
$(0.47)
$(0.74)
$(0.76)
$(1.31)
$(0.39)
$(1.59)
$(0.89)
$(4.08)
$(4.68)
$(0.92)
$(3.57)
$ 0.78
$ 0.78
$ 1.87
$ 0.76
$ 0.79
$ 1.31
$ 0.44
$ 0.43
$ 1.16
$ 4.40
$ 4.68
$ 1.03
$ 4.48
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|
| 19
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Source: Management Projections, FactSet as of 24-Nov-2025
Note: Future value of stock price discounted to 30-Sep-2025 using SEM’s cost of equity of 12.1%. Balance sheet projections and free cash flow allocation per Management Projections. Includes
dividend per share of $0.25 each year discounted using mid-year convention.
B Present Value of Future Stock Price Analysis
Management Projections | ($ in millions, except per share data)
Valuation as of 30-Sept-2025
o Run the 3 year average excluding Concentra (like
from the earlier page and footnote this carefully – I think this will
enable us to support 6.5x – 7.5x
o The current multiple here should be re-labeled as
“Undisturbed” and be as of November 24, 2025 which we say is 6.1x
page 4. Would also flag we say undisturbed 2026E is 6.3x on page
20 based on consensus which I can’t quite tie to the 6.1x on page 4
$21.97
$23.89
$25.11
$17.84 $19.81
$21.16
$13.72
$15.74
$17.22
$ 14.01
$ 0
$ 5
$ 10
$ 15
$ 20
$ 25
$ 30
$ 35
$ 40
Sep-25 Dec-26 Dec-27 Dec-28
$25.01
$30.29
$35.54
$20.25
$25.02
$29.81
$15.49
$19.75
$24.09
$ 14.01
$ 0
$ 5
$ 10
$ 15
$ 20
$ 25
$ 30
$ 35
$ 40
Sep-25 Dec-26 Dec-27 Dec-28
NTM EBITDA ($mm) $ 597 $ 664 $ 730
Net Debt (1,639) (1,495) (1,305)
Present Value of Cumulative Dividends 36 58 76
Fully Diluted Shares Outstanding 125.4 126.1 127.6
Future Value of Stock Price (Including Dividends) Present Value of Future Stock Price (Including Dividends)
Share Price ($)
Share Price ($)
NTM EV/EBITDA Multiple 6.0x 7.0x 8.0x
Undisturbed
Share Price
as of 24-Nov
EV / NTM EBITDA
Multiple:
Undisturbed: 6.3 x
1Y Average: 6.6 x
2Y Average: 7.7x
Undisturbed
Share Price
as of 24-Nov
|
|
| 20
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
11.2 x
9.8 x
7.9 x 7.7 x
8.2 x 7.6 x
6.7 x 6.4 x
6.2 x
Kindred Healthcare
/ Centerre
Healthcare
Corporation
HealthSouth
Corporation /
Reliant Hospital
Partners
Genesis Healthcare
/ Revera
Kindred Healthcare
/ RehabCare
Group
Kindred Healthcare
WholeCo
Acquisition
Select Medical
Holdings
Corporation /
Regency Hospital
Company, L.L.C.
Kindred
Healthcare, Inc. /
Certain facilities
owned by Vista
Healthcare
Holdings, LLC
Vibra Healthcare,
LLC / Certain
facilities owned by
Kindred
Healthcare, Inc.
RehabCare Group,
Inc. / Triumph
HealthCare
Holdings, Inc.
($ in millions) | LTM EV / EBITDA
Source: Company filings and press releases
1 Includes $730mm cash purchase price and $210mm assumed lease obligations. 2 Kindred purchased 5 long-term acute care hospitals from Vista. 3 Vibra purchased 14 long-term acute care hospitals, 1
inpatient rehab hospital, and 1 skilled nursing facility from Kindred.
Acquirer
Target
Announcement
Date 12-Nov-14 11-Jun-15 15-Jun-15 8-Feb-11 19-Dec-17 21-Jun-10 24-Aug-10 25-Apr-13 3-Nov-09
Enterprise Value $ 195 $ 940 $ 240 $ 1,300 $ 4,100 $ 210 $ 180 $ 166 $ 575
Rehab Median: 8.9 x
Select Inpatient Rehabilitation and Long-Term
Acute Care Precedent Transactions
1
2 3
LTAC Median: 6.7 x
Combined Median: 7.7 x
Rehabilitation
Long-Term
Acute Care
C
TBU – adding Scion Health,
scrubbing incremental Deal Logic
run for additional names
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| 21
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
One-Day Premium of U.S. Healthcare Deals | 2021 – 2025
Source: FactSet as of 06-Jan-2026
Note: Excludes biotech transactions.
N = 13
Median: 29 %
Mean: 31 %
25th Percentile: 23 %
75th Percentile: 36 %
D Precedent Premia Paid Analysis
Cash Only | $1 - $5bn
TBU – Price update, show format
with lines across page showing
25th/75th percentile lines across page
TBU – ISG pulling updated deal run
2
1
4
3
1
0
1 1
0-10% 10-20% 20-30% 30-40% 40-50% 50-60% 60-70% 70-80%
|
|
| 22
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Illustrative LBO of Select Medical
($ in millions, except per share data) | Valuation as of 30-Sep-2025
E
Source: Management Projections
Note: Assumes exit date of 30-Sep-2030; % premium calculated based on unaffected share price of $14.01 as of unaffected date as of 24-Nov-2025.
1 Assumes insiders / stakeholders hold 14.9mm shares (12.4% of total basic shares outstanding of 123.5mm).
o Confirm that this includes a separate management
incentive pool that pays 10% of everything above 2.0x MOIC
LTM Exit Multiple
$ 18.15 6.50 x 7.25 x 8.00 x
Leverage
3.5 x $ 12.35 /
(11.9)%
$ 13.91 /
(0.7)%
$ 15.52 /
10.8 %
3.7 x
($138mm
incr.)
$ 12.96 /
(7.5)%
$ 14.53 /
3.7 %
$ 16.14 /
15.2 %
4.0 x
($276mm
incr.)
$ 13.58 /
(3.1)%
$ 15.19 /
8.4 %
$ 16.76 /
19.6 %
Revenue Flex
18.2 x (1.0)% 0.0 % 1.0 %
EBITDA Margin Flex
(0.5)% $ 13.34 /
(4.8)%
$ 14.16 /
1.1 %
$ 15.02 /
7.2 %
0.0 % $ 14.33 /
2.3 %
$ 15.19 /
8.4 %
$ 16.05 /
14.5 %
0.5 % $ 15.31 /
9.3 %
$ 16.18 /
15.5 %
$ 17.11 /
22.2 %
LTM Exit Multiple
$ 18.15 6.50 x 7.25 x 8.00 x
IRR
20.0 % $ 15.10 /
7.8 %
$ 16.87 /
20.4 %
$ 18.69 /
33.4 %
22.5 % $ 13.58 /
(3.1)%
$ 15.19 /
8.4 %
$ 16.76 /
19.6 %
25.0 % $ 12.26 /
(12.5)%
$ 13.70 /
(2.2)%
$ 15.14 /
8.0 %
Key Assumptions | 30-Sep-25 Transaction Date Illustrative Sources & Uses Assuming 7.25x Exit Multiple and 22.5% IRR
◼ Assumes existing debt remains outstanding
◼ Up to 0.5x incremental straight debt financing achievable based
on 2025E Adj. EBITDA of $505mm
— Maximum gross leverage of 4.0 x given earnings volatility of
CIRH segment and significant capex spend
◼ Assumes 7.25x LTM exit multiple, CY2030E exit with a 22.5%
required IRR
◼ Assumes management rolls equity of $233mm (12.4% ownership1
)
◼ Assumes management incentive pool equal to 10% of incremental
exit equity value above 2.0x MOIC
◼ Based upon Management Projections
Sensitivity Analysis: Implied Purchase Price per Share / Relative to Current
4.0x
Leverage 22.5% IRR 22.5% IRR
4.0x Leverage
Sources of Funds
$mm %
Existing Debt $ 1,742 46 %
Sponsor Equity $ 276 7 %
New Debt 1,462 39 %
Rolled Management Equity 233 6 %
Cash on Balance Sheet 60 2 %
Total Sources $ 3,773 100 %
Uses of Funds
$mm %
Equity Purchase Price $ 1,876 50 %
Rolled Debt 1,742 46 %
Illustrative Transaction Fees and Expenses 55 1 %
Minimum Cash 100 3 %
Total Uses $ 3,773 100 %
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| 23
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Source: Management Projections, FactSet market data as of 06-Jan-2026; FDSO and cash per Select Medical Management, debt per Select medical public filings. 1 As of unaffected date as of 24-Nov-2025.
Analysis at Various Prices
($ in millions, except per share data)
Premium
to
Undist.1
Current
Price as
of 06-Jan
Proposal:
$16.00 - $16.20
Purchase Price Per Share $14.01 $ 15.38 $16.00 $16.20 $16.50 $17.00 $17.50 $18.00 $18.50 $19.00 $19.50 $20.00
Memo: Premium to Undist. 0 % 10 % 14 % 16 % 18 % 21 % 25 % 28 % 32 % 36 % 39 % 43 %
Premium vs. Median Analyst Price Target $20.00 (30)% (23)% (20)% (19)% (18)% (15)% (13)% (10)% (8)% (5)% (3)% 0 %
Premium vs. 52-Week High $20.83 (33)% (26)% (23)% (22)% (21)% (18)% (16)% (14)% (11)% (9)% (6)% (4)%
Fully Diluted Shares Outstanding 123.5 123.5 123.5 123.5 123.5 123.5 123.5 123.5 123.5 123.5 123.5 123.5
Fully Diluted Equity Value $1,730 $1,900 $1,976 $2,001 $2,038 $2,100 $2,161 $2,223 $2,285 $2,347 $2,408 $2,470
(+) Debt $1,780 $ 1,780 $1,780 $1,780 $1,780 $1,780 $1,780 $1,780 $1,780 $1,780 $1,780 $1,780
(-) Cash $(60) $(60) $(60) $(60) $(60) $(60) $(60) $(60) $(60) $(60) $(60) $(60)
Enterprise Value $3,450 $3,619 $3,696 $3,721 $3,758 $3,820 $3,881 $3,943 $4,005 $4,067 $4,128 $4,190
EV / EBITDA
Metric
Management Projections 2025E $510 6.8 x 7.1 x 7.2 x 7.3 x 7.4 x 7.5 x 7.6 x 7.7 x 7.9 x 8.0 x 8.1 x 8.2 x
2026E $531 6.5 x 6.8 x 7.0 x 7.0 x 7.1 x 7.2 x 7.3 x 7.4 x 7.5 x 7.7 x 7.8 x 7.9 x
Consensus 2025E $ 513 6.7 x 7.1 x 7.2 x 7.3 x 7.3 x 7.4 x 7.6 x 7.7 x 7.8 x 7.9 x 8.0 x 8.2 x
2026E $ 550 6.3 x 6.6 x 6.7 x 6.8 x 6.8 x 6.9 x 7.1 x 7.2 x 7.3 x 7.4 x 7.5 x 7.6 x
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|
| 24
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Potential Strategic and Sponsor Acquirers
Organize strategics by market cap and sponsors in alpha order
Potential to consider other sponsors depending on historical dialogue
Source: FactSet as of 06-Jan-2026
Note: Potential to consider other sponsors depending on historical dialogue
\\firmwide.corp.gs.com\ibdroot\projects\IBD-NY\sapient2025\977110_1\Presentations\2. Fairness Opinion
Presentation\Excel\CSC\Copy of Select Medical CSC 1.6.2026 v2.xlsx
Company Key Contacts
Sponsors
Carlyle ◼ Bobby Schmidt, Global Co-Head of HC
CD&R ◼ Ravi Sachdev, Head of
Healthcare
LGP ◼ Max Lin, Head of Health Care
Patient Square ◼ Pete Zippelius, Partner
Towerbookook
◼ Jim Momtazee, Managing
Partner
TPG
◼ Jeff Rhodes, Managing Partner
◼ Katherine Wood, Partner
Company Market Cap ($bn) Key Contacts
Strategics
UNH $ 316.1
◼ Wayne DeVeydt, CFO
◼ Rich Mattera, Chief
Development Officer
HCA 111.6
◼ Sam Hazen, CEO
◼ Monica Cintado,
Enterprise Development
THC 18.6
◼ Saum Sutaria, CEO
◼ Mike Maloney, EVP
Corporate Development
Encompass 10.9 ◼ Mark Tarr, President &
CEO
|
|
| 25
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
4 Overview of Potential Strategic Alternatives
|
|
| 26
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Other Potential Strategic Alternatives to Consider
Status Quo Separation of CIRH Accelerated Share
Repurchase
Description ◼ Continue operating business as
standalone entity
◼ Divest / separate CIRH to
delever and further enhance
growth outlook
◼ Launch accelerated share
repurchase program to return
capital to shareholders
Benefits
✔ Access to capital markets
✔ Shareholder liquidity and upside
✔ Avoids transaction costs
✔ Highlight value / growth
potential of rehab
✔ Capital to invest in higher growth
rehab segments
✔ Removes CIRH overhang
✔ Enhanced earnings per share
✔ Return of capital to shareholders
✔ Tax efficiency for selling
shareholders
Considerations
? Public market scrutiny and
volatility
? Foregone valuation premium
? Continued exposure to
regulatory uncertainty
? Execution complexity
? Potential stranded costs
? Tax leakage
? Management indicated
separation / stranded costs likely
prohibitively expensive
? Significant cash outlay
? Timing of repurchase
1 2 3
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|
| 27
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
$12.08 $19.80
$ 14.01 $(6.30)
$ 7.96 $ 15.68
Undisturbed Select
Medical Share Price
Sale of CIRH Multiple Uplift RemainCo Post
CIRH Sale
~12% - 41%
increase
Potential Value Creation From CIRH Separation Assumptions
◼ Transaction date of 30-Sep-2025
◼ Represents current Select
Medical share price as of 24-
Nov-2025
◼ Assumes standalone facilities
within CIRH segment are sold
for 3.0x NTM adjusted EBITDA
of $183mm for $549mm EV1
◼ Assumes RemainCo trades
9.5-11.0x
◼ $50mm of dis-synergies per
Select Medical Management
represents ~76% of corporate
costs allocated to CIRH
EV / NTM EBITDA 6.6 x -- ~2.9-4.4x ~9.5-11.0x
x NTM EBITDA $ 522 $(183) -- $ 339
Enterprise Value $ 3,447 -- -- $ 3,222-3,731
Less: Net Debt $(1,720) $(434) -- $(1,286)
Equity Value $ 1,727 -- -- $ 1,936-2,445
Net Debt / 2025E EBITDA2 3.4 x -- -- 4.0 x
Source: Management Projections, FactSet as of unaffected date as of 24-Nov-2025, assumes cash of $60mm per Select Medical Management, debt of $1,780mm per Select Medical public filings
Note: EBITDA figures adjusted to include corporate allocation; corporate EBITDA is allocated as a percentage of EBITDA. 1 Assumes tax leakage with $0mm tax basis, 21% tax rate, and $0mm of dis-synergies per
Select Medical Management. 2 WholeCo 2025E EBITDA of $510mm and RemainCo 2025E EBITDA of $318mm.
B
B
A
C
C
A
($ in millions, except per share data)
2 Separation of CIRH
Implied RemainCo Share Price / % Value Creation of RemainCo Post CIRH Sale
Select RemainCo (Ex-CIRH)
Multiple
9.50 x 10.25 x 11.00 x
CIRH Multiple
2.0 x $ 14.51 /
3.5 %
$ 16.57 /
18.3 %
$ 18.63 /
33.0 %
3.0 x $ 15.68 /
11.9 %
$ 17.74 /
26.6 %
$ 19.80 /
41.3 %
4.0 x $ 16.85 /
20.3 %
$ 18.91 /
35.0 %
$ 20.97 /
49.7 %
Dis-synergies
$ 0 $ 25 $ 50
Tax Basis
$ 0 $ 15.68 /
11.9 %
$ 13.76 /
(1.8)%
$ 11.83 /
(15.5)%
$ 100 $ 15.85 /
13.1 %
$ 13.93 /
(0.6)%
$ 12.00 /
(14.3)%
$ 200 $ 16.02 /
14.3 %
$ 14.10 /
0.6 %
$ 12.17 /
(13.1)%
Breakeven EV
/ NTM EBITDA
Multiple: 8.9 x
Preliminary – to be
discussed with
management
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|
| 28
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Source: Management Projections, FactSet as of unaffected date as of 24-Nov-2025.
Note: Future value of stock price discounted to 30-Sep-2025 using SEM’s cost of equity of 12.1%. Balance sheet projections and free cash flow allocation per Management Projections. Includes
dividends per share of $0.25 each year discounted using mid year convention. 1 Share repurchase price calculated as current share price grown at cost of equity of 12.1%; assumes share
repurchase funded with debt at S + 2.00%.
3 Accelerated Share Repurchase
Management Projections | ($ in millions, except per share data)
Valuation as of 30-Sept-2025
TBU
Model what a $250mm ASR could do to their PV
of FSP by 2026 YE and show the impact to
leverage which will likely be prohibitively high
$22.79
$25.07
$26.55
$18.13 $20.47
$22.10
$13.47
$15.87
$17.65
$ 14.01
$ 0
$ 5
$ 10
$ 15
$ 20
$ 25
$ 30
$ 35
$ 40
Sep-25 Dec-26 Dec-27 Dec-28
$21.97
$23.89
$25.11
$17.84 $19.81
$21.16
$13.72
$15.74
$17.22
$ 14.01
$ 0
$ 5
$ 10
$ 15
$ 20
$ 25
$ 30
$ 35
$ 40
Sep-25 Dec-26 Dec-27 Dec-28
Status Quo $250mm Year-End 2026 Share Repurchase1
Share Price ($)
Share Price ($)
Present Value of Future Share Price
Undisturbed
Share Price
as of 24-Nov
Undisturbed
Share Price
as of 24-Nov
EV / NTM EBITDA
Multiple:
Undisturbed: 6.3 x
1Y Average: 6.6 x
2Y Average: 7.7x
NTM EBITDA ($mm) $ 597 $ 664 $ 730
Net Debt (1,899) (1,766) (1,586)
Present Value of Cumulative Dividends 36 55 70
Fully Diluted Shares Outstanding 110.9 111.7 113.1
NTM EV/EBITDA Multiple 6.0x 7.0x 8.0x
|
|
| 29
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
A Appendix
|
|
| 30
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
One-Day Premium of U.S. Healthcare Deals | 2021 – 2025
Source: FactSet as of 06-Jan-2026
Note: Excludes biotech transactions.
Precedent Premia Paid Analysis
Cash Only | $1 - $5bn | $ in billions
TBU – Price update, show format
with lines across page showing
25th/75th percentile lines across page
Date Announced Target Short Name Acquiror Short Name Deal Value Premium Paid
9/22/2025 Premier Inc Patient Square Capital $ 2.6 7.5 %
1/6/2025 Inari Medical Inc Stryker Corp 4.9 60.7
12/11/2024 Patterson Cos Inc Patient Square Capital 2.8 35.7
6/18/2024 Silk Road Medical Inc Boston Scientific Corp 1.2 26.9
1/8/2024 Axonics Inc Boston Scientific Corp 3.7 23.3
6/5/2023 Amedisys Inc Optum Inc 3.5 30.7
7/21/2022 1Life Healthcare Inc Amazon.com Inc 3.7 76.8
7/7/2022 Meridian Bioscience Inc SD Biosensor / SJL Partners 1.5 1.3
4/18/2022 Natus Medical Inc Prince Parent Inc 1.2 28.6
1/10/2022 Apria Inc Owens & Minor Inc 1.5 26.2
4/11/2021 Luminex Corp DiaSorin SpA 1.8 12.3
3/15/2021 GenMark Diagnostics Inc Roche Holding AG 1.8 30.0
1/4/2021 Magellan Health Inc Centene Corp 2.5 46.1
25th Percentile 23.3 %
Median 28.6 %
Mean 30.6 %
75th Percentile 32.0 %
/
|
|
| 31
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
WholeCo Historical Financial Summary
2022 – 2024 | $ in millions
Source: Select Medical Management
2022A 2023A 2024A
CIRH $2,234 $2,300 $2,444
% Growth 2.9 % 6.3 %
Inpatient Rehab $917 $980 $1,111
% Growth 6.9 % 13.4 %
Outpatient $1,125 $1,189 $1,250
% Growth 5.7 % 5.2 %
Corporate / Other $333 $358 $382
% Growth 7.4 % 6.8 %
Total Revenue $4,609 $4,826 $5,187
% Growth 4.7 % 7.5 %
CIRH $111 $246 $302
% Margin 5.0 % 10.7 % 12.3 %
Inpatient Rehab $198 $222 $246
% Margin 21.6 % 22.6 % 22.1 %
Outpatient $102 $112 $109
% Margin 9.1 % 9.4 % 8.7 %
Corporate / Other $(99) $(134) $(146)
% Margin (29.6)% (37.4)% (38.1)%
Adjusted EBITDA $313 $446 $510
% Margin 6.8 % 9.2 % 9.8 %
Revenue and EBITDA by segment, corporate expense, 2022 – 2024A
Adjusted EBITDA
Label each page’s P&L as Adjusted EBITDA b/c it’s excluding SBC
|
|
| 32
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Historical Segment Financials | CIRH
2022 – 2024 | $ in millions, except NPRPPD
Source: Select Medical Management
2022A 2023A 2024A
CIRH
NPRPPD $1,967 $2,067 $2,177
% Growth 0.0 % 5.1 % 5.4 %
Patient Days 1,127,911 1,108,492 1,118,757
% Growth (0.5)% (1.7)% 0.9 %
Net Patient Revenue - Core $2,218 $2,291 $2,436
Net Patient Revenue - Other 7 5 5
Total Net Patient Revenue $2,225 $2,296 $2,441
% Growth (0.4)% 3.2 % 6.3 %
Other Revenue 9 4 4
Total Net Revenue $2,234 $2,300 $2,444
Personnel Expense 1,428 1,326 1,377
% Margin 63.9 % 57.7 % 56.3 %
Facilities Expense 127 135 144
% Margin 5.7 % 5.9 % 5.9 %
All Other Expense 569 593 622
% Margin 25.4 % 25.8 % 25.4 %
Adjusted EBITDA $111 $246 $302
% Margin 5.0 % 10.7 % 12.3 %
|
|
| 33
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Historical Segment Financials | IRF
2022 – 2024 | $ in millions, except NPRPPD
2022A 2023A 2024A
IRF
NPRPPD $1,953 $2,017 $2,134
% Growth 4.6 % 3.3 % 5.8 %
Patient Days 430,547 446,145 470,594
% Growth 3.8 % 3.6 % 5.5 %
Net Patient Revenue - Core $841 $900 $1,004
Net Patient Revenue - Other 31 31 55
Total Net Patient Revenue $872 $931 $1,060
% Growth 8.0 % 6.7 % 13.8 %
Other Revenue 45 49 51
Total Net Revenue $917 $980 $1,111
Personnel Expense 530 555 629
% Margin 57.8 % 56.6 % 56.6 %
Facilities Expense 58 60 71
% Margin 6.3 % 6.1 % 6.4 %
All Other Expense 131 143 165
% Margin 14.3 % 14.6 % 14.8 %
Adjusted EBITDA $198 $222 $246
% Margin 21.6 % 22.6 % 22.1 %
Source: Select Medical Management
|
|
| 34
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Historical Segment Financials | OP
2022 – 2024 | $ in millions, except NPRPV
2022A 2023A 2024A
OP
NPRPV $103 $100 $101
% Growth 0.2 % (2.6)% 0.7 %
Total Clinic Visits 9,573,980 10,657,558 11,147,920
% Growth 4.1 % 11.3 % 4.6 %
Net Patient Revenue - Clinics $982 $1,065 $1,121
Net Patient Revenue - Contracts 72 49 54
Total Net Patient Revenue $1,054 $1,113 $1,175
% Growth 3.8 % 5.6 % 5.5 %
Other Revenue 71 75 75
Total Net Revenue $1,125 $1,189 $1,250
Personnel Expense 774 826 888
% Margin 68.8 % 69.5 % 71.0 %
Facilities Expense 138 146 149
% Margin 12.3 % 12.3 % 11.9 %
All Other Expense 111 105 104
% Margin 9.9 % 8.9 % 8.3 %
Adjusted EBITDA $102 $112 $109
% Margin 9.1 % 9.4 % 8.7 %
Source: Select Medical Management
|
|
| 35
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Disclaimer
These materials have been prepared and are provided by Goldman Sachs on a confidential basis solely for the information and assistance of the Special Committee of
Select Medical Holdings Corporation (the "Company") in connection with their consideration of the matters referred to herein. These materials and Goldman Sachs’
presentation relating to these materials (the “Confidential Information”) may not be disclosed to the third party or circulated or referred to publicly or used for or relied
upon for any other purpose without the prior written consent of Goldman Sachs. The Confidential Information was not prepared with a view to public disclosure or to
conform to any disclosure standards under any state, federal or international securities laws or other laws, rules or regulations, and Goldman Sachs does not take any
responsibility for the use of the Confidential Information by persons other than those set forth above. Notwithstanding anything in this Confidential Information to the
contrary, the Company may disclose to any person the US federal income and state income tax treatment and tax structure of any transaction described herein and all
materials of any kind (including tax opinions and other tax analyses) that are provided to the Company relating to such tax treatment and tax structure, without
Goldman Sachs imposing any limitation of any kind. The Confidential Information has been prepared by Goldman Sachs Investment Banking and is not a product of
Goldman Sachs Global Investment Research.
Goldman Sachs and its affiliates are engaged in advisory, underwriting and financing, principal investing, sales and trading, research, investment management and
other financial and non-financial activities and services for various persons and entities. Goldman Sachs and its affiliates and employees, and funds or other entities
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regular, ordinary course client service dialogues with clients and potential clients to review events, opportunities, and conditions in particular sectors and industries and,
in that connection, Goldman Sachs may make reference to the Company, but Goldman Sachs will not disclose any confidential information received from the
Company.
The Confidential Information has been prepared based on historical financial information, forecasts and other information obtained by Goldman Sachs from publicly
available sources, the management of the Company or other sources (approved for our use by the Company in the case of information from management and non-public information). In preparing the Confidential Information, Goldman Sachs has relied upon and assumed, without assuming any responsibility for independent
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Sachs’ role in any due diligence review is limited solely to performing such a review as it shall deem necessary to support its own advice and analysis and shall not be
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The Confidential Information does not address the underlying business decision of the Company to engage in any transaction, or the relative merits of any transaction
or strategic alternative referred to herein as compared to any other transaction or alternative that may be available to the Company. The Confidential Information is
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volatility in the credit, financial and stock markets on the Company, any other party to any transaction or any transaction.
|
### EX-99.(C)(VI) - EXHIBIT 99.(C)(VI)
EX-99.(C)(VI)
6
tm2611660d2_ex99-cvi.htm
EXHIBIT 99.(C)(VI)
Exhibit 99.(c)(vi)
|
| Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Materials for the Special Committee
Goldman Sachs & Co. LLC
January 29th, 2026
Goldman Sachs does not provide accounting, tax, or legal advice. Notwithstanding anything in this document to the contrary, and except as required to enable
compliance with applicable securities law, you (and each of your employees, representatives, and other agents) may disclose to any and all persons the US
federal income and state tax treatment and tax structure of the transaction and all materials of any kind (including tax opinions and other tax analyses) that are
provided to you relating to such tax treatment and tax structure, without Goldman Sachs imposing any limitation of any kind.
|
|
| 1
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
2027 MA Advance Notice Has Resulted in a
Material Pullback Across Healthcare
Source: FactSet, Market data as of 28-Jan-26
1 Represents delta between closing prices on 26-Jan-26 and 28-Jan-26. 2 Acute care peers include HCA, Tenet, UHS, Community Health, and Ardent. 3 Post acute peers include Encompass, USPH, Enhabit,
Addus, Aveanna, OptionCare, Surgery Partners, Davita, and Fresenius.
Market Reaction to 2027 MA Advance Notice Key Commentary
2D Stock Price
Reaction1
2D EV / NTM
EBITDA Delta
(2.8)% (0.1)x
(9.5)% (1.1)x
(2.9)% (0.2)x
(11.7)% (0.7)x
(9.3)% (0.8)x
(26.4)% (2.3)x
(7.0)% (0.7)x
(16.4)% (1.9)x
Acute Care Peer
Median2
(1.5)% (0.0)x
Post Acute Peer
Median3
(3.8)% (0.5)x
“CMS released its proposed 2027 Medicare Advantage and Part D
Advance Notice on January 26, projecting an average payment increase
of just 0.09%, or about $700 million across the Medicare Advantage (MA)
program. The proposal fell short on Wall Street’s expectations and
quickly influenced insurer stock prices, flagging how closely the industry
tracks even small changes in federal payment policy”
- Managed Healthcare Executive, 27-Jan-26
“Looking briefly to 2027, the advanced notice published yesterday
simply doesn't reflect the reality of medical utilization and cost trends.
We will continue to work with CMS to ensure an appropriate final
growth rate calculation to avoid a profoundly negative impact on seniors'
benefits and access to care. That would be a deeply unfortunate result
for a program that already is under funding pressure from the previous
administration, despite its track record of success serving seniors and
taxpayers”
- Timothy Noel, CEO UnitedHealthcare, 27-Jan-26
“These proposed payment policies are about making sure Medicare
Advantage works better for the people it serves. By strengthening
payment accuracy and modernizing risk adjustment, CMS is helping
ensure beneficiaries continue to have affordable plan choices and
reliable benefits, while protecting taxpayers from unnecessary
spending that is not oriented towards addressing real health needs.”
- Dr. Mehmet Oz, CMS Administrator, 27-Jan-26
|
|
| 2
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Stallion Buyer Consortium Has Been Engaged in
Diligence Since Data Room Opened 15-Jan
Initial Indication
of Interest ◼ $16.00 – $16.20
VDR Users
◼ WCAS: 6
◼ JP Morgan: 6
◼ Wells Fargo: 5
◼ Barclays: 4
◼ Ropes Gray: 12
◼ Cravath: 7
◼ PwC: 8
Documents
Available ◼ 8,352
Diligence Calls
✓ 1/27-1/28: Management Presentation
◼ TBC: Discussion on separability of
business segments
◼ TBD: Additional calls requests across
functional areas (legal, regulatory, tech,
etc.)
◼ Operational
— Capacity and occupancy metrics
— De-novo, JV partnerships, and acquisition pipeline
— Clinical quality metrics
— Third-party vendor spend
◼ Finance & Accounting
— Segment level financials
— Financial forecast and underlying assumptions
— Corporate costs
— Growth vectors across each segment
— Strategic JV expansions
◼ Human Resources
— Labor productivity metrics
— Labor inflation and wage growth
— Employee census
— Employment-related claims
◼ Legal / Compliance / Tax
— Legal structure
— Tax returns
— Intercompany transactions
— LTACH compliance
◼ Technology
— Product and service roadmaps
— IT spend
— Cybersecurity practices
— AI strategy
Diligence Process Summary Key Areas of Focus
\\firmwide.corp.gs.com\ibdroot\projects\IBD-NY\sapient2025\977110_1\Presentations\8.
Special Committee Process Update\Excel\Content Engagement Report.xlsx
63% of Diligence Requests Have Been Closed To-Date
(160 of 254 Total Requests)
|
|
| 3
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Company Key Contacts
Strategic
UNH
◼ Wayne DeVeydt, CFO
◼ Rich Mattera, Chief Development Officer
HCA
◼ Sam Hazen, CEO
◼ Monica Cintado, Enterprise Development
THC
◼ Saum Sutaria, CEO
◼ Mike Maloney, EVP Corporate Development
Encompass ◼ Mark Tarr, President & CEO
Sponsor
Carlyle ◼ Bobby Schmidt, Global Co-Head of HC
CD&R ◼ Ravi Sachdev, Head of Healthcare
KKR ◼ Max Lin, Head of Health Care
LGP ◼ Pete Zippelius, Partner
TPG
◼ Jeff Rhodes, Managing Partner
◼ Katherine Wood, Partner
Would have strategics / sponsors on LHS that we
suggested for outreach
And then bifurcate RHS into 3 buckets: Interested / Not
interested / Awaiting feedback
First bucket would have no names
Encompass a pass
Speaking to United on Friday
Tenet encompass and HCA all no
LGP and KKR a no so far
Cd&r also a no
Source: FactSet as of 27-Jan-2025
Parties Suggested for Outreach Feedback To Date
Interested
None
Awaiting Feedback
Not Interested
Feedback from Parties to Date Suggests Limited
Interest in Potential Acquisition
Call scheduled 30-Jan
|
|
| 4
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Potential Next Steps from Here
◼ Requires buyer consortium to formalize a
revised view on value based on information
provided since initial bid was submitted in
November 2025, indicating their seriousness
and conviction in their offer
— Allows consortium to outline remaining
diligence required to reach announcement
◼ Potential to accelerate overall M&A timeline,
with clarity around what additional information
and time commitment from management may be
needed to complete process
Benefits of Requesting Consortium to Re-Bid
Based on Diligence to Date
Considerations Around Requesting Consortium
to Re-Bid Based on Diligence to Date
◼ Potential for buyer consortium to maintain initial
bid range without completing thorough due
diligence across all functional areas
— Additional diligence may be needed for
consortium to uncover all potential synergies,
growth opportunities, and value creation
opportunities with a separation of CIRH
◼ Consortium may view timeline as rushed, with
only 1 in-person management presentation
completed to date
◼ Additional time could allow consortium to
investment more significant time and financial
resources into extensive due diligence,
demonstrating a higher level of commitment to
the transaction, and therefore come back with a
potentially higher and more informed bid
— Revised bid that results from extensive
diligence may be perceived as more credible
There are several benefits and considerations the Committee should
consider as to when to request a re-bid from the Consortium
◼ A re-bid in the near term allows the Committee to elicit additional information from
Consortium shortly
— A request for an update on valuation and a timeline to announcement may force
the Consortium to crystallize its view on value
— Potentially results in Consortium remaining firm on valuation and citing recent MA
headwinds as a potential risk that has emerged since their initial proposal
◼ Alternatively, providing additional information and management access has several
potential benefits
— Potential to increase Consortium’s conviction as they devote additional time and
resources to the opportunity
— Potentially allows MA environment to further settle
— Requires careful messaging to ensure that it does not signal current proposal is
adequate
|
|
| 5
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Disclaimer
These materials have been prepared and are provided by Goldman Sachs on a confidential basis solely for the information and assistance of the Special Committee of
Select Medical Holdings Corporation (the "Company") in connection with their consideration of the matters referred to herein. These materials and Goldman Sachs’
presentation relating to these materials (the “Confidential Information”) may not be disclosed to the third party or circulated or referred to publicly or used for or relied
upon for any other purpose without the prior written consent of Goldman Sachs. The Confidential Information was not prepared with a view to public disclosure or to
conform to any disclosure standards under any state, federal or international securities laws or other laws, rules or regulations, and Goldman Sachs does not take any
responsibility for the use of the Confidential Information by persons other than those set forth above. Notwithstanding anything in this Confidential Information to the
contrary, the Company may disclose to any person the US federal income and state income tax treatment and tax structure of any transaction described herein and all
materials of any kind (including tax opinions and other tax analyses) that are provided to the Company relating to such tax treatment and tax structure, without
Goldman Sachs imposing any limitation of any kind. The Confidential Information has been prepared by Goldman Sachs Investment Banking and is not a product of
Goldman Sachs Global Investment Research.
Goldman Sachs and its affiliates are engaged in advisory, underwriting and financing, principal investing, sales and trading, research, investment management and
other financial and non-financial activities and services for various persons and entities. Goldman Sachs and its affiliates and employees, and funds or other entities
they manage or in which they invest or have other economic interest or with which they co-invest, may at any time purchase, sell, hold or vote long or short positions
and investments in securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments of the Company, any other party to any
transaction and any of their respective affiliates or any currency or commodity that may be involved in any transaction. Goldman Sachs Investment Banking maintains
regular, ordinary course client service dialogues with clients and potential clients to review events, opportunities, and conditions in particular sectors and industries and,
in that connection, Goldman Sachs may make reference to the Company, but Goldman Sachs will not disclose any confidential information received from the
Company.
The Confidential Information has been prepared based on historical financial information, forecasts and other information obtained by Goldman Sachs from publicly
available sources, the management of the Company or other sources (approved for our use by the Company in the case of information from management and non-public information). In preparing the Confidential Information, Goldman Sachs has relied upon and assumed, without assuming any responsibility for independent
verification, the accuracy and completeness of all of the financial, legal, regulatory, tax, accounting and other information provided to, discussed with or reviewed by us,
and Goldman Sachs does not assume any liability for any such information. Goldman Sachs does not provide accounting, tax, legal or regulatory advice.
Goldman Sachs has not made an independent evaluation or appraisal of the assets and liabilities (including any contingent, derivative or off-balance sheet assets and
liabilities) of the Company or any other party to any transaction or any of their respective affiliates and has no obligation to evaluate the solvency of the Company or
any other party to any transaction under any state or federal laws relating to bankruptcy, insolvency or similar matters. The analyses contained in the Confidential
Information do not purport to be appraisals nor do they necessarily reflect the prices at which businesses or securities actually may be sold or purchased. Goldman
Sachs’ role in any due diligence review is limited solely to performing such a review as it shall deem necessary to support its own advice and analysis and shall not be
on behalf of the Company. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or
less favorable than suggested by these analyses, and Goldman Sachs does not assume responsibility if future results are materially different from those forecast.
The Confidential Information does not address the underlying business decision of the Company to engage in any transaction, or the relative merits of any transaction
or strategic alternative referred to herein as compared to any other transaction or alternative that may be available to the Company. The Confidential Information is
necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to Goldman Sachs as of, the date of such
Confidential Information and Goldman Sachs assumes no responsibility for updating or revising the Confidential Information based on circumstances, developments or
events occurring after such date. The Confidential Information does not constitute any opinion, nor does the Confidential Information constitute a recommendation to
the Board, any security holder of the Company or any other person as to how to vote or act with respect to any transaction or any other matter. The Confidential
Information, including this disclaimer, are subject to, and governed by, any written agreement between the Company, the Board and/or any committee thereof, on the
hand, and Goldman Sachs, on the other hand. The Confidential Information does not address, nor does Goldman Sachs express any view as to, the potential effects of
volatility in the credit, financial and stock markets on the Company, any other party to any transaction or any transaction.
|
### EX-99.(C)(VII) - EXHIBIT 99.(C)(VII)
EX-99.(C)(VII)
7
tm2611660d2_ex99-cvii.htm
EXHIBIT 99.(C)(VII)
Exhibit 99.(c)(vii)
|
| Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Materials for the Special Committee
Goldman Sachs & Co. LLC
February 6th, 2026
Goldman Sachs does not provide accounting, tax, or legal advice. Notwithstanding anything in this document to the contrary, and except as required to enable
compliance with applicable securities law, you (and each of your employees, representatives, and other agents) may disclose to any and all persons the US
federal income and state tax treatment and tax structure of the transaction and all materials of any kind (including tax opinions and other tax analyses) that are
provided to you relating to such tax treatment and tax structure, without Goldman Sachs imposing any limitation of any kind.
|
|
| 1
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Today’s Agenda and Next Steps
2
Buyer and
Shareholder Update
1 Process Update
3 Valuation Update
4
Illustrative Script for
Call with Bob Ortenzio
Today’s Agenda Next Steps
2
Refine Analysis on
Separation of CIRH
1
Debrief Following Call Between
Bob and Special Committee
3
Refine Analysis of Stallion’s
Shareholder Base
4
Refine Valuation Analysis
Following Incremental Diligence
|
|
| 2
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
1 Process Update
|
|
| 3
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Stallion Buyer Consortium Has Been Engaged in
Diligence Since Data Room Opened 15-Jan
Initial Indication
of Interest ◼ $16.00 – $16.20
VDR Users
◼ WCAS: 11
◼ JP Morgan: 21
◼ Wells Fargo: 22
◼ Barclays: 13
◼ Ropes Gray: 36
◼ Cravath: 24
◼ PwC: 18
◼ Bain: 22
◼ Palo Alto Strategy: 7
Documents
Available ◼ 9,526
Diligence Process Summary Diligence Meetings Completed to Date
\\firmwide.corp.gs.com\ibdroot\projects\IBD-NY\sapient2025\977110_1\Presentations\8.
Special Committee Process Update\Excel\Content Engagement Report.xlsx
81% of Diligence Requests Have Been Closed To-Date
(285 of 353 Total Requests)
Date Topic
27-Jan-26 In-person Management Presentation
28-Jan-26 In-person Management Presentation
30-Jan-26 Separation Discussion
3-Feb-26 Accounting and Tax Discussion
3-Feb-26 Technology / Cyber Discussion
3-Feb-26 Pipeline Discussion
4-Feb-26 Outpatient Rehab Discussion
4-Feb-26 Financial Discussion
4-Feb-26 Legal Discussion
5-Feb-26 LTACH Regulatory Discussion
5-Feb-26 Tech / Cyber Follow Up Discussion
6-Feb-26 Separation Follow Up Discussion
|
|
| 4
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Areas of Focus During Recent Diligence Sessions
\\firmwide.corp.gs.com\ibdroot\projects\IBD-NY\sapient2025\977110_1\Presentations\8.
Special Committee Process Update\Excel\Content Engagement Report.xlsx
CIRH OP Rehab IRF Financial
Potential for Value
Creation as Private
Company
◼ Understanding key
entanglements that
would need to be
managed in
separation
(personnel,
accounting, tax and
JV)
◼ Impact of recent
regulatory
developments on
long term
profitability
◼ Evaluating potential
ways to rationalize
CIRH beyond full
separation
◼ Review of clinical
personnel and
incentive structure
to understand
variability in clinic
performance
◼ Scheduling
optimization
opportunities and
other potential tools
to further enhance
clinical productivity
◼ Ability to enhance
back-office / RCM
capabilities
◼ Drivers of
performance vs.
Encompass
◼ Q4’25 performance
v. budget
◼ Review of same
store growth
outlook v. de novo
contribution
◼ Business
development
review – site
identification,
historical
performance,
pipeline review
◼ Opportunities for
portfolio / corporate
rationalization
◼ Accelerate
operating leverage /
business
performance with
further technology
investment (OP
scheduling and
RCM)
◼ Accelerate de novo
investment
Presentation
◼ [ ]
CIRH
Separation ◼ [ ]
Accounting
and Tax
◼ [ ]
Technology
and Cyber ◼ [ ]
Pipeline ◼ [ ]
OP Rehab ◼ [ ]
Financial ◼ [ ]
Legal ◼ [ ]
LTACH
Regulatory
◼ [ ]
Procurement ◼ [ ]
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| 5
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
2 Buyer and Shareholder Update
|
|
| 6
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Company Key Contacts
Strategic
UNH
◼ Wayne DeVeydt, CFO
◼ Rich Mattera, Chief Development Officer
HCA
◼ Sam Hazen, CEO
◼ Monica Cintado, Enterprise Development
THC
◼ Saum Sutaria, CEO
◼ Mike Maloney, EVP Corporate Development
Encompass ◼ Mark Tarr, President & CEO
Sponsor
Carlyle ◼ Bobby Schmidt, Global Co-Head of HC
CD&R ◼ Ravi Sachdev, Head of Healthcare
KKR ◼ Max Lin, Head of Health Care
LGP ◼ Pete Zippelius, Partner
TPG
◼ Jeff Rhodes, Managing Partner
◼ Katherine Wood, Partner
Would have strategics / sponsors on LHS that we
suggested for outreach
And then bifurcate RHS into 3 buckets: Interested / Not
interested / Awaiting feedback
First bucket would have no names
Encompass a pass
Speaking to United on Friday
Tenet encompass and HCA all no
LGP and KKR a no so far
Cd&r also a no
Parties Suggested for Outreach Feedback To Date
Interested
None
Awaiting Feedback
Not Interested
Feedback from Parties to Date Suggests Limited
Interest in Potential Acquisition
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| 7
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Investor Meeting Date Attendees Commentary
T. Rowe 16-Jan
◼ Dan Thomas
◼ Mike Malatesta
◼ Mike Tarvin
◼ Supportive of Special Committee’s evaluation process
◼ Noted they have been supportive of Bob in the past
◼ Acknowledged they could see how Select might operate
better as a private company
◼ Indicated they thought $16.20 was “low”
Western
Standard
To be scheduled,
requested meeting 3-Feb ◼ Special Committee ◼ N/A
Summary of Recent Shareholder Engagement
High level table of engagement with
TRowe and Western Standard
Shareholder / date of meeting /
attendees / commentary
|
|
| 8
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
3 Valuation Update
|
|
| 9
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Discounted
Cash Flow
Analysis
Management
Projections
◼ 10-Year DCF discounted to 30-Sep-2025
◼ 10.0% – 12.0% WACC
◼ 1.5% – 2.5% perpetuity growth rate
◼ Cash of $60mm per Select Medical public filings
◼ Total debt of $1,780mm per Select Medical public filings
Present Value
of Future
Stock Price
Management
Projections
◼ 6.0x – 8.0x NTM EV / EBITDA
◼ Cost of equity: 12.1%
Precedent
Transactions
Analysis
Precedent
Healthcare
Transactions
◼ EBITDA range: 6.2x – 11.2x based on inpatient rehabilitation and long-term acute
care precedent transactions since 2009
◼ LTM adjusted EBITDA of $505mm as of 30-Sep-2025 per Select Medical
Management
◼ Cash of $60mm per Select Medical public filings
◼ Total debt of $1,780mm per Select Medical public filings
Premia Paid
Analysis
Premium to
Undisturbed
Price
◼ U.S. healthcare M&A transactions from $1 – $5bn in enterprise value since 2021,
cash-only
◼ 23% - 36% premia to undisturbed price (represents 25th to 75th percentile)
LBO
Analysis
Management
Projections
◼ 30-Sep-2025 transaction date
◼ 20.0% - 25.0% required IRR; 4.0x max leverage
◼ 6.5 x – 8.0 x LTM exit multiple
Public Market
Perspectives
52-Week High
and Low
◼ 52-week low: 06-Aug-2025
◼ 52-week high: 05-Feb-2025
Forward Analyst
Price Targets
◼ Median: $20.00 per share
◼ Based on 5 analyst price targets
$ 14.86
$ 13.72
$ 11.40
$ 17.23
$ 12.26
$ 11.65
$ 14.00
$ 25.01
$ 25.11
$ 31.82
$ 19.05
$ 18.69
$ 20.37
$ 21.00
Summary of Illustrative & Preliminary Financial
Analyses
Methodology Equity Value per Share Comments
Proposal: $ 16.00 - $16.20
Source: Management Projections, dated 30-Dec-2025, prepared by Select Medical Management and approved for use by Goldman Sachs (“Management Projections”), Select Medical public filings,
Market data as of 04-Feb-2026
($ in millions, except per share data)
For Reference
oPV of FSP should be 15.20 – 22.28
The orange bubble should be undisturbed price of $14.01on page 19
oAdd a bullet the forward PTs which says CY2026E Consensus Median
EBITDA is [ ]% above current Management estimates
oLBO: Run the exit multiples at 6.5x – 8.0x with 7.25x at the midpoint
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|
| 10
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Sensitivity Downside Case Base Case Upside Case Equity Value Per Share Sensitivity
CIRH
Rate (2.0)% reduction in rate
in 2028-onward
Increases from (1.0)%
to 2.0% growth
between 2026 and
2030
-
IRF
Rate (2.0)% reduction in rate
in 2028-onward
Increases from (1.9)%
to 2.0% growth
between 2026 and
2030
-
OP
Rate (2.0)% reduction in rate
in 2028-onward
Increases from 0.8% to
2.0% growth between
2026 and 2030
-
WholeCo
Rate
(2.0)% reduction in rate
in 2028-onward for
CIRH, IRF and OP
Combination of all
three scenarios
outlined above
-
DCF Assumptions
PGR (0.5)% 2.0% +0.5 %
WACC +1.0 % 11.0 % (1.0)%
Source: Management Projections
Note: Cash flows are discounted to 30-Sep-2025 using mid-year convention; assumes cash of $60mm per Select Medical management, debt of $1,780mm per Select Medical public filings, fully diluted share count of
123.5mm shares consisting of 120.5mm shares of common stock outstanding and 3.0mm RSUs per Select Medical Management. 2025E figures equal to sum of Q1 – Q3 2025A plus Q4 2025E figures. Assumes tax rate of
21% per Select Medical Management.
Illustrative Discounted Cash Flow Sensitivity
$ Per Share
$(1.59)
$(1.58)
$(0.93)
$(4.09)
$(0.92)
$(3.57)
$ 1.03
$ 4.48
Illustrative DCF “Midpoint” of $19.11
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|
| 11
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Change in DCF Value Relative to Illustrative “Midpoint”
$ Per Share
Base Case Rate
Change YoY Change in DCF Value Relative to Illustrative “Midpoint” of $19.111
CIRH
2026: (1.0)%
2027: 1.9%
2028: 2.0%
IRF
2026: (1.9)%
2027: 4.7%
2028: 2.0%
OP
2026: 0.8%
2027: 2.0%
2028: 2.0%
WholeCo
Defined by
segment base
case above
Source: Management Projections
Note: Cash flows are discounted to 30-Sep-2025 using mid-year convention; assumes cash of $60mm per Select Medical management, debt of $1,780mm per Select Medical public filings, fully diluted share count of
123.5mm shares consisting of 120.5mm shares of common stock outstanding and 3.0mm RSUs per Select Medical Management. Assumes tax rate of 21% per Select Medical Management. 1 Percentage values represent
rate from 2028 onward.
$(0.41)
$(0.81)
$(1.20)
$(1.59)
1% 0% (1)% (2)%
$(0.40)
$(0.80)
$(1.19)
$(1.58)
1% 0% (1)% (2)%
$(0.24)
$(0.47)
$(0.70)
$(0.93)
1% 0% (1)% (2)%
$(1.05)
$(2.08)
$(3.10)
$(4.09)
1% 0% (1)% (2)%
Base Case
Increased
Reimbursement
Relative to
Base Case
Decreased
Reimbursement
Relative to
Base Case
Base Case:
$ 19.11 Per
Share
2028+ Annual Rate Growth
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|
| 12
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Source: Management Projections, FactSet market data as of 04-Feb-2026; FDSO and cash per Select Medical Management, debt per Select medical public filings. 1 As of unaffected date as of 24-Nov-2025.
Analysis at Various Prices
($ in millions, except per share data)
Premium
to
Undist.1
Current
Price as
of 04-Feb
Proposal:
$16.00 - $16.20
Purchase Price Per Share $14.01 $ 15.29 $16.00 $16.20 $16.50 $17.00 $17.50 $18.00 $18.50 $19.00 $19.50 $20.00
Memo: Premium to Undist. 0 % 9 % 14 % 16 % 18 % 21 % 25 % 28 % 32 % 36 % 39 % 43 %
Premium vs. Median Analyst Price Target $20.00 (30)% (24)% (20)% (19)% (18)% (15)% (13)% (10)% (8)% (5)% (3)% 0 %
Premium vs. 52-Week High $20.37 (31)% (25)% (21)% (20)% (19)% (17)% (14)% (12)% (9)% (7)% (4)% (2)%
Fully Diluted Shares Outstanding 123.5 123.5 123.5 123.5 123.5 123.5 123.5 123.5 123.5 123.5 123.5 123.5
Fully Diluted Equity Value $1,730 $1,888 $1,976 $2,001 $2,038 $2,100 $2,161 $2,223 $2,285 $2,347 $2,408 $2,470
(+) Debt $1,780 $ 1,780 $1,780 $1,780 $1,780 $1,780 $1,780 $1,780 $1,780 $1,780 $1,780 $1,780
(-) Cash $(60) $(60) $(60) $(60) $(60) $(60) $(60) $(60) $(60) $(60) $(60) $(60)
Enterprise Value $3,450 $3,608 $3,696 $3,721 $3,758 $3,820 $3,881 $3,943 $4,005 $4,067 $4,128 $4,190
EV / EBITDA
Metric
Management Projections 2025E $510 6.8 x 7.1 x 7.2 x 7.3 x 7.4 x 7.5 x 7.6 x 7.7 x 7.9 x 8.0 x 8.1 x 8.2 x
2026E $531 6.5 x 6.8 x 7.0 x 7.0 x 7.1 x 7.2 x 7.3 x 7.4 x 7.5 x 7.7 x 7.8 x 7.9 x
Consensus 2025E $ 513 6.7 x 7.0 x 7.2 x 7.3 x 7.3 x 7.4 x 7.6 x 7.7 x 7.8 x 7.9 x 8.0 x 8.2 x
2026E $ 550 6.3 x 6.6 x 6.7 x 6.8 x 6.8 x 6.9 x 7.1 x 7.2 x 7.3 x 7.4 x 7.5 x 7.6 x
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|
| 13
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
4 Illustrative Script for Call with Bob Ortenzio
|
|
| 14
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Would have strategics / sponsors on LHS that we
suggested for outreach
And then bifurcate RHS into 3 buckets: Interested / Not
interested / Awaiting feedback
First bucket would have no names
Encompass a pass
Speaking to United on Friday
Tenet encompass and HCA all no
LGP and KKR a no so far
Cd&r also a no
General Guidelines and Potential Questions
from Special Committee to Bob Ortenzio
General Guidelines
◼ Don't proactively bring up value
◼ Don't disclose details of the Committee's process
◼ Don't indicate acceptance of any proposed terms (including price)
◼ Don't engage on the merits of any statements about the Company, the Committee, the proposal, or other strategic alternatives
◼ Do communicate that the Committee is working expeditiously and following proper process
◼ Do convey thoughtful consideration of any perspectives or ideas presented
Potential Questions from Special Committee to Bob Ortenzio
◼ Process
— Can you help us understand where WCAS is? How are they thinking about timing from here? What do you view as the "long pole" items from a
diligence perspective?
— How are you thinking about financing? Are your advisors on the financing prepared to complete their diligence on the timeline you’ve outlined
as well?
◼ Diligence
— What have you and your team learned throughout diligence thus far (e.g., separability of CIRH, opportunities to optimize / streamline current
OP footprint, etc.)? What has been better than expected? Are there areas of concern or focus on the WCAS side that we should be aware of?
◼ Strategic Alternatives
— How has your thinking about CIRH separation alternatives evolved? What do you view as the key challenges?
— Can you share a bit more on your thesis for why Select should be private? Why shouldn’t we continue to execute in the public markets?
— We’ve also had certain shareholders suggest other capital structure alternatives (i.e. more share buyback) as a better path forward. Why
shouldn’t we just do that? How do you think about this in terms of your ability to get a transaction that shareholders will approve done?
Potential Topics that May Be Raised by Bob Ortenzio
◼ Uncertainty around the go-forward rate outlook, impact of OBBBA, inbounds from shareholders, or other points that may suggest why
the Committee should accept the consortium’s proposal:
— We’ve certainly been willing to listen to what shareholders have said, which has always been important to us. As I’ve mentioned, the most
important thing is that we get the best outcome for our shareholders and maximize value in a situation where we’d recommend a sale of the
company.
◼ Challenges with separating CIRH and ability for a separation to create value in the public markets
— Our job is to evaluate everything objectively and carefully consider all the ways we could maximize value for the company.
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Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Would have strategics / sponsors on LHS that we
suggested for outreach
And then bifurcate RHS into 3 buckets: Interested / Not
interested / Awaiting feedback
First bucket would have no names
Encompass a pass
Speaking to United on Friday
Tenet encompass and HCA all no
LGP and KKR a no so far
Cd&r also a no
Potential Q&A From Bob Ortenzio to Special
Committee
◼ Valuation
— Question: Based on diligence done to date, we’re prepared to submit a revised proposal of $[ ] per share. Is that at a level the Committee would
transact at? We’ve done a lot of our value-driving diligence to date and think we can move quickly towards a transaction.
– Answer:
– I appreciate you sharing that perspective with me and I’ll share that with the rest of the Committee and our advisors.
– As you know, this is going to make the Committee’s decision quite difficult based on the current management forecast.
– [As appropriate] The management forecast is the same forecast we discussed as a Board last October, before your offer. Can you help
me understand what has changed about your view on the forecast?
— Question: Can you give me a bit more color on the Committee’s current valuation expectations?
– Answer:
– Our focus remains on maximizing shareholder value, which includes evaluating your proposal as well as other alternatives including our
status quo path as a public company.
– You have management’s forecast, and I’m sure you can understand the value implications of that.
◼ Process-Related
— Question: We’ve been working as quickly as possible and pushing our advisors to wrap up their diligence. Assuming we can continue to close out any
outstanding questions our team has, we’d like to be in a position to announce a transaction as soon as the company’s Q4 / FY 2025 earnings call on
Thursday, February 19th. Do you think we can execute on that timeline?
– Answer:
– As you know, we continue to evaluate all opportunities that can enhance value for shareholders.
– We would need to review a revised written proposal that outlines your revised proposal and specifically what diligence remains
outstanding to determine appropriate next steps from here .
– [As appropriate] Practically speaking, announcing a transaction on February 19th is challenging, and I’m sure you’d agree that doing this
quickly cannot come at the expense of doing this the right way.
— Question: Are there other parties that you’re engaging with? Do you have other offers you’re evaluating?
– Answer:
– I can’t comment on that, but know that we are working diligently to ensure that we comprehensively evaluate all of the company’s
potential paths forward.
– We will do what’s best for Select’s shareholders in evaluating strategic alternatives.
— Question: We need greater focus from management to determine whether there is a transaction to do here. Can you direct management to be more
engaged?
– Answer:
– The management team has been working hard to be responsive to your questions, which have included an in-person management
presentation, 10 diligence calls this week, and written responses to the questions you’ve shared.
– We also think it is important that management remain focused on preparing for the upcoming earnings release – that will be an
opportunity to hear perspectives from shareholders on potential paths forward as well.
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| 16
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
A Appendix
|
|
| 17
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Source: Management Projections
Note: Cash flows are discounted to 30-Sep-2025 using mid-year convention; assumes cash of $60mm per Select Medical management, debt of $1,780mm per Select Medical public filings, fully
diluted share count of 123.5mm shares consisting of 120.5mm shares of common stock outstanding and 3.0mm RSUs per Select Medical Management. 2025E figures equal to sum of Q1 – Q3
2025A plus Q4 2025E figures. 1 Per Select Medical Management.
Discounted Cash Flow Analysis
($ in millions, except per share data) | Valuation as of 30-Sep-2025
Management Projections
Terminal
Value
$in millions 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E 2034E 2035E
Total Revenue $5,437 $5,722 $6,007 $6,312 $6,602 $6,916 $ 7,209 $ 7,475 $ 7,710 $ 7,908 $ 8,066 $ 8,066
% Growth 4.8 % 5.2 % 5.0 % 5.1 % 4.6 % 4.8 % 4.2 % 3.7 % 3.1 % 2.6 % 2.0 %
Adj. EBITDA $ 510 $ 531 $ 597 $ 664 $ 730 $ 801 $ 828 $ 848 $ 863 $ 871 $ 876 $ 876
% Margin 9.4 % 9.3 % 9.9 % 10.5 % 11.1 % 11.6 % 11.5 % 11.4 % 11.2 % 11.0 % 10.9 % 10.9 %
(-) Stock-Based Compensation (18) (21) (23) (25) (28) (31) (31) (31) (31) (31) (31) (31)
EBITDA $ 492 $ 510 $ 574 $ 639 $ 702 $ 770 $ 797 $ 818 $ 832 $ 840 $ 845 $ 845
% Margin 9.0 % 8.9 % 9.6 % 10.1 % 10.6 % 11.1 % 11.1 % 10.9 % 10.8 % 10.6 % 10.5 % 10.5 %
(-) Depreciation & Amortization (142) (146) (150) (150) (150) (150) (150) (150) (150) (150) (150) (166)
% of Revenue 2.6 % 2.6 % 2.5 % 2.4 % 2.3 % 2.2 % 2.1 % 2.0 % 2.0 % 1.9 % 1.9 % 2.1 %
EBIT $ 350 $ 363 $ 423 $ 489 $ 551 $ 620 $ 646 $ 667 $ 682 $ 689 $ 694 $ 678
% Margin 6.4 % 6.4 % 7.0 % 7.7 % 8.4 % 9.0 % 9.0 % 8.9 % 8.8 % 8.7 % 8.6 % 8.4 %
(-) Taxes (73) (76) (89) (103) (116) (130) (136) (140) (143) (145) (146) (142)
% Tax Rate1 21% 21% 21% 21% 21% 21% 21% 21% 21% 21% 21% 21%
NOPAT $ 276 $ 287 $ 334 $ 386 $ 436 $ 489 $ 511 $ 527 $ 539 $ 545 $ 548 $ 536
% Margin 5.1 % 5.0 % 5.6 % 6.1 % 6.6 % 7.1 % 7.1 % 7.1 % 7.0 % 6.9 % 6.8 % 6.6 %
(+) Distributions from Unconsolidated Subsidiaries 56 55 58 59 61 63 66 68 70 72 73 73
(-) Distribution to and Purchases of Non-Controlling Interests (67) (78) (81) (83) (86) (88) (92) (95) (98) (101) (103) (103)
(+) Depreciation and Amortization 142 146 150 150 150 150 150 150 150 150 150 166
(-) Change in NWC (14) (15) (19) (25) (27) (28) (26) (23) (21) (17) (14) (14)
(-) Capital Expenditures (215) (237) (175) (175) (175) (175) (175) (175) (175) (175) (175) (175)
Unlevered Free Cash Flow $ 178 $ 157 $ 268 $ 313 $ 360 $ 412 $ 434 $ 452 $ 465 $ 474 $ 480 $ 484
Implied Equity Value per Share
Perpetuity Growth Rate
20.4 x 1.5% 2.0% 2.5%
WACC
10.0% $ 22.34 $ 23.59 $ 25.01
11.0% $ 18.19 $ 19.11 $ 20.14
12.0% $ 14.86 $ 15.55 $ 16.31
Implied Terminal LTM EBITDA Multiple
Perpetuity Growth Rate
6.6 x 1.5% 2.0% 2.5%
WACC
10.0% 6.9 x 7.4 x 7.9 x
11.0% 6.2 x 6.6 x 7.0 x
12.0% 5.7 x 6.0 x 6.3 x
Implied Terminal Value as % of EV
Perpetuity Growth Rate
0.7 % 1.5% 2.0% 2.5%
WACC
10.0% 50.9 % 52.6 % 54.3 %
11.0% 47.1 % 48.6 % 50.1 %
12.0% 43.6 % 44.9 % 46.3 %
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| 18
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Source: Management Projections, FactSet as of 24-Nov-2025
Note: Future value of stock price discounted to 30-Sep-2025 using SEM’s cost of equity of 12.1%. Balance sheet projections and free cash flow allocation per Management Projections. Includes
dividend per share of $0.25 each year discounted using mid-year convention.
Present Value of Future Stock Price Analysis
Management Projections | ($ in millions, except per share data)
Valuation as of 30-Sept-2025
o Run the 3 year average excluding Concentra (like
from the earlier page and footnote this carefully – I think this will
enable us to support 6.5x – 7.5x
o The current multiple here should be re-labeled as
“Undisturbed” and be as of November 24, 2025 which we say is 6.1x
page 4. Would also flag we say undisturbed 2026E is 6.3x on page
20 based on consensus which I can’t quite tie to the 6.1x on page 4
$21.97
$23.89
$25.11
$17.84 $19.81
$21.16
$13.72
$15.74
$17.22
$ 14.01
$ 0
$ 5
$ 10
$ 15
$ 20
$ 25
$ 30
$ 35
$ 40
Sep-25 Dec-26 Dec-27 Dec-28
$25.01
$30.29
$35.54
$20.25
$25.02
$29.81
$15.49
$19.75
$24.09
$ 14.01
$ 0
$ 5
$ 10
$ 15
$ 20
$ 25
$ 30
$ 35
$ 40
Sep-25 Dec-26 Dec-27 Dec-28
NTM EBITDA ($mm) $ 597 $ 664 $ 730
Net Debt (1,639) (1,495) (1,305)
Present Value of Cumulative Dividends 36 58 76
Fully Diluted Shares Outstanding 125.4 126.1 127.6
Future Value of Stock Price (Including Dividends) Present Value of Future Stock Price (Including Dividends)
Share Price ($)
Share Price ($)
NTM EV/EBITDA Multiple 6.0x 7.0x 8.0x
Undisturbed
Share Price
as of 24-Nov
EV / NTM EBITDA
Multiple:
Undisturbed: 6.3 x
1Y Average: 6.6 x
2Y Average: 7.7x
Undisturbed
Share Price
as of 24-Nov
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| 19
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
11.2 x
9.8 x
7.9 x 7.7 x
8.2 x 7.6 x
6.7 x 6.4 x
6.2 x
Kindred Healthcare
/ Centerre
Healthcare
Corporation
HealthSouth
Corporation /
Reliant Hospital
Partners
Genesis Healthcare
/ Revera
Kindred Healthcare
/ RehabCare
Group
Kindred Healthcare
WholeCo
Acquisition
Select Medical
Holdings
Corporation /
Regency Hospital
Company, L.L.C.
Kindred
Healthcare, Inc. /
Certain facilities
owned by Vista
Healthcare
Holdings, LLC
Vibra Healthcare,
LLC / Certain
facilities owned by
Kindred
Healthcare, Inc.
RehabCare Group,
Inc. / Triumph
HealthCare
Holdings, Inc.
($ in millions) | LTM EV / EBITDA
Source: Company filings and press releases
1 Includes $730mm cash purchase price and $210mm assumed lease obligations. 2 Kindred purchased 5 long-term acute care hospitals from Vista. 3 Vibra purchased 14 long-term acute care hospitals, 1
inpatient rehab hospital, and 1 skilled nursing facility from Kindred.
Acquirer
Target
Announcement
Date 12-Nov-14 11-Jun-15 15-Jun-15 8-Feb-11 19-Dec-17 21-Jun-10 24-Aug-10 25-Apr-13 3-Nov-09
Enterprise Value $ 195 $ 940 $ 240 $ 1,300 $ 4,100 $ 210 $ 180 $ 166 $ 575
Rehab Median: 8.9 x
Select Inpatient Rehabilitation and Long-Term
Acute Care Precedent Transactions
1
2 3
LTAC Median: 6.7 x
Combined Median: 7.7 x
Rehabilitation
Long-Term
Acute Care
TBU – adding Scion Health,
scrubbing incremental Deal Logic
run for additional names
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|
| 20
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
One-Day Premium of U.S. Healthcare Deals | 2021 – 2025
Source: FactSet as of 04-Feb-2026
Note: Excludes biotech transactions.
N = 13
Median: 29 %
Mean: 31 %
25th Percentile: 23 %
75th Percentile: 36 %
Precedent Premia Paid Analysis
Cash Only | $1 - $5bn
TBU – Price update, show format
with lines across page showing
25th/75th percentile lines across page
TBU – ISG pulling updated deal run
2
1
4
3
1
0
1 1
0-10% 10-20% 20-30% 30-40% 40-50% 50-60% 60-70% 70-80%
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| 21
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Illustrative LBO of Select Medical
($ in millions, except per share data) | Valuation as of 30-Sep-2025
Source: Management Projections
Note: Assumes exit date of 30-Sep-2030; % premium calculated based on unaffected share price of $14.01 as of unaffected date as of 24-Nov-2025.
1 Assumes insiders / stakeholders hold 14.9mm shares (12.4% of total shares of common stock outstanding of 123.5mm).
o Confirm that this includes a separate management
incentive pool that pays 10% of everything above 2.0x MOIC
LTM Exit Multiple
$ 18.15 6.50 x 7.25 x 8.00 x
Leverage
3.5 x $ 12.35 /
(11.9)%
$ 13.91 /
(0.7)%
$ 15.52 /
10.8 %
3.7 x
($138mm
incr.)
$ 12.96 /
(7.5)%
$ 14.53 /
3.7 %
$ 16.14 /
15.2 %
4.0 x
($276mm
incr.)
$ 13.58 /
(3.1)%
$ 15.19 /
8.4 %
$ 16.76 /
19.6 %
Revenue Flex
18.2 x (1.0)% 0.0 % 1.0 %
EBITDA Margin Flex
(0.5)% $ 13.34 /
(4.8)%
$ 14.16 /
1.1 %
$ 15.02 /
7.2 %
0.0 % $ 14.33 /
2.3 %
$ 15.19 /
8.4 %
$ 16.05 /
14.5 %
0.5 % $ 15.31 /
9.3 %
$ 16.18 /
15.5 %
$ 17.11 /
22.2 %
LTM Exit Multiple
$ 18.15 6.50 x 7.25 x 8.00 x
IRR
20.0 % $ 15.10 /
7.8 %
$ 16.87 /
20.4 %
$ 18.69 /
33.4 %
22.5 % $ 13.58 /
(3.1)%
$ 15.19 /
8.4 %
$ 16.76 /
19.6 %
25.0 % $ 12.26 /
(12.5)%
$ 13.70 /
(2.2)%
$ 15.14 /
8.0 %
Key Assumptions | 30-Sep-25 Transaction Date Illustrative Sources & Uses Assuming 7.25x Exit Multiple and 22.5% IRR
◼ Assumes existing debt remains outstanding
◼ Up to 0.5x incremental straight debt financing achievable based
on 2025E Adj. EBITDA of $505mm
— Maximum gross leverage of 4.0 x given earnings volatility of
CIRH segment and significant capex spend
◼ Assumes 7.25x LTM exit multiple, CY2030E exit with a 22.5%
required IRR
◼ Assumes management rolls equity of $233mm (12.4% ownership1
)
◼ Assumes management incentive pool equal to 10% of incremental
exit equity value above 2.0x MOIC
◼ Based upon Management Projections
Sensitivity Analysis: Implied Purchase Price per Share / Relative to Current
4.0x
Leverage 22.5% IRR 22.5% IRR
4.0x Leverage
Sources of Funds
$mm %
Existing Debt $ 1,742 46 %
Sponsor Equity $ 276 7 %
New Debt 1,462 39 %
Rolled Management Equity 233 6 %
Cash on Balance Sheet 60 2 %
Total Sources $ 3,773 100 %
Uses of Funds
$mm %
Equity Purchase Price $ 1,876 50 %
Rolled Debt 1,742 46 %
Illustrative Transaction Fees and Expenses 55 1 %
Minimum Cash 100 3 %
Total Uses $ 3,773 100 %
|
|
| 22
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Shareholder Base Analysis
Source: FactSet, Refinitiv, as of 04-Feb-26
¹ Quarter of the investors’ most recent position initiation in the security. Resets whenever the investor sells out completely. ² Calculated as the weighted average cost of current shares held based
on quarterly VWAPs and all share purchases from Q1 '05 - Q4 '25. 3 Based on share price at market close on 04-Feb-2025 ($15.29). 4 Based on number of shares held in Q4 ’25.
Parties that have reached out to Select since offer from consortium made public
Western Standard says they
own 2.2% - can you check
why this says 0.8%
• Page 23 – Michael is going to want more here. (put this page after page
8)
• Can you reach out to ASA and ask them if they can help us
look at the shareholder base for Select and identify “paths to a
successful M&A transaction”
• Then, to this page, can you add the breakout of index v. actives
v. other types of shareholders? What I think it’s going to show
is that index shareholders are the majority of this companies
register which should make things easier for us (run that by
ASA to get their perspective as well – Matt Kim) – ideally we
can get his input before the 6pm call
Cost Basis & Returns Most Recent Historical Positions (Shares in mm)
Fund AUM ($bn) Cost Basis¹
Unrealized
Gain² % OS
Shares
(mm) Q4 '25 Q3 '25 Q2 '25 Q1 '25 Q4 '24 Q3 '24 Q2 '24
T. Rowe Price Mid-Cap Value $ 14.0 $ 11.42 33.9 % 7.0 % 9.1 9.1 8.7 8.7 9.3 9.3 9.4 9.6
Western Standard, LLC 0.2 13.69 11.7 1.6 2.1 2.1 1.1
D. E. Shaw 117.8 14.53 5.2 1.4 1.9 1.9 1.9 0.7 0.2 0.0 0.0 0.1
T. Rowe Price Small Cap Value 8.4 12.85 18.9 1.3 1.7 1.7 1.7 2.1 2.3 2.5 2.8 2.9
Millennium Mgm't 123.8 14.20 7.7 1.2 1.6 1.6 1.6 0.3 1.7 0.3 0.0 0.7
Prosight Capital 0.5 14.10 8.5 0.7 0.9 0.9 0.9 0.4 0.0
Hood River Small-Cap Growth Fund 4.8 18.30 (16.4) 0.6 0.8 0.8 0.8 0.9 1.7 0.9 0.2 0.0
John Hancock Funds II Mid Value Fund 1.3 9.68 57.9 0.6 0.8 0.8 0.8 0.8 0.8 0.9 0.9 1.0
Vanguard Tax-Managed Small-Cap Fund 9.2 13.38 14.3 0.6 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.8
BlackRock Advantage Small Cap Core Fund 4.2 25.26 (39.5) 0.6 0.7 0.7 0.9 0.9 0.9 0.8 0.3 0.1
DFA U.S. Targeted Value Portfolio 14.1 11.27 35.7 0.5 0.6 0.6 0.6 0.6 0.5 0.5 0.6 0.6
Qube Research & Technologies Ltd 71.3 13.20 15.8 0.4 0.6 0.6 0.6 0.0 0.2 0.3 0.1
DFA US Small Cap Value Portfolio 17.0 13.31 14.9 0.4 0.6 0.6 0.6 0.0
Woodline Partners LP 22.0 13.20 15.8 0.4 0.6 0.6 0.6 0.5 0.7
Strategic Advisers US Total Stock Fund 73.3 19.96 (23.4) 0.4 0.6 0.6 0.5 0.5 0.5 0.2 0.0
DFA US Small Cap Portfolio 17.3 9.99 53.0 0.4 0.5 0.5 0.6 0.7 0.8 0.9 1.0 1.0
DFA Dimensional US Targeted Value ETF 11.9 16.34 (6.4) 0.4 0.5 0.5 0.5 0.5 0.4 0.4 0.3 0.3
EA Bridgeway Omni Small-Cap Value ETF 1.8 20.60 (25.8) 0.4 0.5 0.5 0.4 0.5 0.6 0.3
ExodusPoint Capital Management, LP 7.2 13.20 15.8 0.3 0.4 0.4 0.4
DFA U.S. Micro Cap Portfolio 6.9 19.79 (22.7) 0.3 0.4 0.4 0.4 0.3 0.2 0.2 0.2 0.2
Total 19.5 % 25.3 25.3 24.1 18.6 20.7 18.1 17.2 18.1
Median $ 13.53 13.0 %
Weighted Average³ $ 13.51 17.9 %
Select’s Shareholder Base Consists of ~40% Index Investors4
|
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| 23
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Disclaimer
These materials have been prepared and are provided by Goldman Sachs on a confidential basis solely for the information and assistance of the Special Committee of
Select Medical Holdings Corporation (the "Company") in connection with their consideration of the matters referred to herein. These materials and Goldman Sachs’
presentation relating to these materials (the “Confidential Information”) may not be disclosed to the third party or circulated or referred to publicly or used for or relied
upon for any other purpose without the prior written consent of Goldman Sachs. The Confidential Information was not prepared with a view to public disclosure or to
conform to any disclosure standards under any state, federal or international securities laws or other laws, rules or regulations, and Goldman Sachs does not take any
responsibility for the use of the Confidential Information by persons other than those set forth above. Notwithstanding anything in this Confidential Information to the
contrary, the Company may disclose to any person the US federal income and state income tax treatment and tax structure of any transaction described herein and all
materials of any kind (including tax opinions and other tax analyses) that are provided to the Company relating to such tax treatment and tax structure, without
Goldman Sachs imposing any limitation of any kind. The Confidential Information has been prepared by Goldman Sachs Investment Banking and is not a product of
Goldman Sachs Global Investment Research.
Goldman Sachs and its affiliates are engaged in advisory, underwriting and financing, principal investing, sales and trading, research, investment management and
other financial and non-financial activities and services for various persons and entities. Goldman Sachs and its affiliates and employees, and funds or other entities
they manage or in which they invest or have other economic interest or with which they co-invest, may at any time purchase, sell, hold or vote long or short positions
and investments in securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments of the Company, any other party to any
transaction and any of their respective affiliates or any currency or commodity that may be involved in any transaction. Goldman Sachs Investment Banking maintains
regular, ordinary course client service dialogues with clients and potential clients to review events, opportunities, and conditions in particular sectors and industries and,
in that connection, Goldman Sachs may make reference to the Company, but Goldman Sachs will not disclose any confidential information received from the
Company.
The Confidential Information has been prepared based on historical financial information, forecasts and other information obtained by Goldman Sachs from publicly
available sources, the management of the Company or other sources (approved for our use by the Company in the case of information from management and non-public information). In preparing the Confidential Information, Goldman Sachs has relied upon and assumed, without assuming any responsibility for independent
verification, the accuracy and completeness of all of the financial, legal, regulatory, tax, accounting and other information provided to, discussed with or reviewed by us,
and Goldman Sachs does not assume any liability for any such information. Goldman Sachs does not provide accounting, tax, legal or regulatory advice.
Goldman Sachs has not made an independent evaluation or appraisal of the assets and liabilities (including any contingent, derivative or off-balance sheet assets and
liabilities) of the Company or any other party to any transaction or any of their respective affiliates and has no obligation to evaluate the solvency of the Company or
any other party to any transaction under any state or federal laws relating to bankruptcy, insolvency or similar matters. The analyses contained in the Confidential
Information do not purport to be appraisals nor do they necessarily reflect the prices at which businesses or securities actually may be sold or purchased. Goldman
Sachs’ role in any due diligence review is limited solely to performing such a review as it shall deem necessary to support its own advice and analysis and shall not be
on behalf of the Company. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or
less favorable than suggested by these analyses, and Goldman Sachs does not assume responsibility if future results are materially different from those forecast.
The Confidential Information does not address the underlying business decision of the Company to engage in any transaction, or the relative merits of any transaction
or strategic alternative referred to herein as compared to any other transaction or alternative that may be available to the Company. The Confidential Information is
necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to Goldman Sachs as of, the date of such
Confidential Information and Goldman Sachs assumes no responsibility for updating or revising the Confidential Information based on circumstances, developments or
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hand, and Goldman Sachs, on the other hand. The Confidential Information does not address, nor does Goldman Sachs express any view as to, the potential effects of
volatility in the credit, financial and stock markets on the Company, any other party to any transaction or any transaction.
|
### EX-99.(C)(VIII) - EXHIBIT 99.(C)(VIII)
EX-99.(C)(VIII)
8
tm2611660d2_ex99-cviii.htm
EXHIBIT 99.(C)(VIII)
Exhibit 99.(c)(viii)
|
| Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Materials for the Special Committee
Goldman Sachs & Co. LLC
February 8th, 2026
Goldman Sachs does not provide accounting, tax, or legal advice. Notwithstanding anything in this document to the contrary, and except as required to enable
compliance with applicable securities law, you (and each of your employees, representatives, and other agents) may disclose to any and all persons the US
federal income and state tax treatment and tax structure of the transaction and all materials of any kind (including tax opinions and other tax analyses) that are
provided to you relating to such tax treatment and tax structure, without Goldman Sachs imposing any limitation of any kind.
|
|
| 1
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Forms of Response to a Potential Proposal
Potential Reaction #1: Reduction or Little to No Improvement
— Response tone can be negative or disappointed
— “You are aware of our forecast and what that implies”
— “This proposal puts us in a very difficult position as it relates to making a decision on next steps”
— “Do you now have a different view of our management forecast that you approved this past fall?”
— “What is the path to improve your proposal from here?”
— “We are surprised to see [effectively] no improvement given the extensive diligence conducted. Are there any diligence findings
that made it difficult to increase the proposal?”
Potential Reaction #2: Marginal Improvement
— Tone shifts to neutral
— “Thank you for your revised proposal – we recognize the significant amount of work your team has done to date”
— “We will give this serious consideration, but of course you know our Board-approved projections and the value implications of
those”
— “What further diligence would you need to see additional value and improve your proposal?”
— “Are there areas of risk to the forecast that are limiting the Consortium in seeing additional value?”
— “How do you think about timeline and remaining diligence?”
Potential Reaction #3: Significant Improvement
— Response tone shifts to positive
— “We appreciate the focused and efficient diligence process that your team has run”
— “We see that you are making every effort to put forth an improved proposal”
— “How do you think about timeline and remaining diligence?”
Regardless of proposal, remain non-committal to next steps and note that you will review their formal proposal
with your advisors and come back to them promptly to discuss feedback on their proposal and next steps
|
### EX-99.(C)(IX) - EXHIBIT 99.(C)(IX)
EX-99.(C)(IX)
9
tm2611660d2_ex99-cix.htm
EXHIBIT 99.(C)(IX)
Exhibit 99.(c)(ix)
|
| Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Materials for the Special Committee
Goldman Sachs & Co. LLC
February 10th, 2026
Goldman Sachs does not provide accounting, tax, or legal advice. Notwithstanding anything in this document to the contrary, and except as required to enable
compliance with applicable securities law, you (and each of your employees, representatives, and other agents) may disclose to any and all persons the US
federal income and state tax treatment and tax structure of the transaction and all materials of any kind (including tax opinions and other tax analyses) that are
provided to you relating to such tax treatment and tax structure, without Goldman Sachs imposing any limitation of any kind.
|
|
| 1
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Actuals Comparison vs. Budget and Consensus
Q4 2025A Q4 2024A % Change YoY Q4’25 Budget % Beat / (miss) Consensus2 % Beat / (miss)
Revenue $ 1,397 $ 1,313 6 % $ 1,380 1 % $ 1,360 3 %
CIRH $ 630 $ 600 5 % $ 603 4 % $ 600 5 %
IRF $ 339 $ 294 15 % $ 340 (0)% $ 336 1 %
OP $ 325 $ 320 2 % $ 338 (4)% $ 326 (0)%
Corp. $ 103 $ 98 5 % $ 99 4 % $ 105 (2)%
Adj. EBITDA $ 105 $ 116 (10)% $ 122 (14)% $ 124 (16)%
CIRH $ 66 $ 63 5 % $ 54 24 % $ 58 15 %
IRF $ 69 $ 62 11 % $ 76 (8)% $ 73 (6)%
OP $ 11 $ 27 (58)% $ 34 (67)% $ 26 (57)%
Corp. $(42) $(36) (17)% $(41) (2)% $(41) (4)%
Actuals Comparison vs. Budget and Consensus
FY2025A FY2024A % Change YoY FY’25 Budget % Beat / (miss) Consensus % Beat / (miss)
Revenue $ 5,453 $ 5,187 1 % $ 5,437 0 % $ 5,416 1 %
CIRH $ 2,478 $ 2,444 1 % $ 2,451 1 % $ 2,448 1 %
IRF $ 1,289 $ 1,111 16 % $ 1,290 (0)% $ 1,285 0 %
OP $ 1,285 $ 1,250 3 % $ 1,298 (1)% $ 1,286 (0)%
Corp. $ 401 $ 382 5 % $ 397 1 % $ 403 (0)%
Adj. EBITDA $ 493 $ 510 (3)% $ 510 (3)% $ 513 (4)%
CIRH $ 265 $ 302 (12)% $ 253 5 % $ 257 3 %
IRF $ 279 $ 246 13 % $ 285 (2)% $ 283 (1)%
OP $ 90 $ 109 (17)% $ 113 (20)% $ 105 (14)%
Corp. $(141) $(146) 3 % $(140) (1)% $(139) (1)%
Stallion Q4 and FY2025 Earnings Summary
\\firmwide.corp.gs.com\ibdroot\projects\IBD-NY\sapient2025\977110_1\Presentations\(2026.02.08) - Special Committee Follow Up Call\12.25 YTD
MDA Common Size Analysis_Offline.xlsx
Q4 2025A Earnings Results vs Budget and Consensus1
FY 2025A Earnings Results vs Budget and Consensus1
Source: Management Projections, dated 30-Dec-2025, prepared by Select Medical Management and approved for use by Goldman Sachs (“Management Projections”), Select Medical FY2025
Draft 10-K, Select Medical public filings, Market data as of 09-Feb-2026.
1 Consensus segment figures may not sum to WholeCo figures due to segment level financials calculated as medians. 2 Due to limited brokers reporting segmented quarterly EBITDA, segment
level Q4’25 Consensus figures are derived from FY’25E consensus estimates less last 9 months Q3’25A.
($ in millions)
|
|
| 2
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Stallion FY2026 Guidance Summary
($ in millions)
Source: Management Projections, dated 30-Dec-2025, prepared by Select Medical Management and approved for use by Goldman Sachs (“Management Projections”), Select Medical
Management FY2026 Guidance, Market data as of 09-Feb-2026.
1 Budget and consensus are measured relative to the midpoint of guidance.
Consensus Budget FY2026 Guidance Budget vs. Guidance1 Guidance vs. Consensus1 Budget vs. Consensus
FY2026 FY2026 Low Midpoint High Delta % Change Delta % Change Delta % Change
Revenue $ 5,638 $ 5,722 $ 5,600 $ 5,700 $ 5,800 $ 22 0 % $ 62 1 % $ 83 1 %
CIRH $ 2,484 $ 2,506 $ 22 1 %
IRF $ 1,407 $ 1,402 $(6) (0)%
OP $ 1,322 $ 1,358 $ 36 3 %
Corp. $ 430 $ 457 $ 27 6 %
Adj. EBITDA $ 550 $ 531 $ 520 $ 530 $ 540 $ 1 0 % $(20) (4)% $(19) (4)%
CIRH $ 257 $ 256 $(1) (1)%
IRF $ 324 $ 301 $(23) (7)%
OP $ 111 $ 120 $ 9 8 %
Corp. $(142) $(146) $(4) (3)%
Adj. EPS $ 1.27 $ 1.27 $ 1.22 $ 1.27 $ 1.32 $ 0.00 0 % $ 0.00 0 % $ 0.00 0 %
CapEx $ 175 $ 237 $ 200 $ 210 $ 220 $(27) (11)% $(35) (20)% $(62) (26)%
|
### EX-99.(C)(X) - EXHIBIT 99.(C)(X)
EX-99.(C)(X)
10
tm2611660d2_ex99-cx.htm
EXHIBIT 99.(C)(X)
Exhibit 99.(c)(x)
|
| Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Materials for the Special Committee
Goldman Sachs & Co. LLC
February 23rd
, 2026
Goldman Sachs does not provide accounting, tax, or legal advice. Notwithstanding anything in this document to the contrary, and except as required to enable
compliance with applicable securities law, you (and each of your employees, representatives, and other agents) may disclose to any and all persons the US
federal income and state tax treatment and tax structure of the transaction and all materials of any kind (including tax opinions and other tax analyses) that are
provided to you relating to such tax treatment and tax structure, without Goldman Sachs imposing any limitation of any kind.
|
|
| 1
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Would have strategics / sponsors on LHS that we
suggested for outreach
And then bifurcate RHS into 3 buckets: Interested / Not
interested / Awaiting feedback
First bucket would have no names
Encompass a pass
Speaking to United on Friday
Tenet encompass and HCA all no
LGP and KKR a no so far
Cd&r also a no
Illustrative Talking Points
◼ Talking points for Dan in call with Bob
— Bob, I was surprised to see the revised proposal of $16 and hear your bankers say we should feel good about it because
given the quarter, you all were considering a lower bid
— I’ve known you a long time and if United were here offering you $16 to buy Select, I don’t think you would think about that for
too long
— As you’ve acknowledged in the past, nothing about our forecast has changed relative to what you approved last fall, so we
are struggling to see a path forward
— Nothing about the quarter should have come as a surprise and you know about the longer-term potential of this
business
— Feedback from investors upon the initial announcement in November was that the offer then was insufficient and that tone
has not changed following the earnings release
— A bid of $16 per share is just inadequate – it represents a 14% premium to what our undisturbed price was in November
before your offer
— We are viewing the undisturbed price as of 24-Nov-2025, the day the offer was announced post-market, which is a
premium 3 percentage points lower than what you note in the revised bid using 21-Nov-2025 as the undisturbed date
— At $17 per share, this would be an incremental $124mm or 3% increase in Enterprise Value from your current offer and
increase the LTM EBITDA multiple by 0.3x
— At $17.50 per share, this would be an incremental $186mm or 5% increase in Enterprise Value from your current offer and
increase the LTM EBITDA multiple by ~0.4x
— Note: See the following page for incremental detail
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|
| 2
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Source: Management Projections, FactSet market data as of 20-Feb-2026; FDSO, cash, and debt per Select Medical Management 1 As of unaffected date as of 24-Nov-2025.
Analysis at Various Prices
($ in millions, except per share data)
Premium
to Undist.1
Current
Price as of
20-Feb
Updated
Offer
Purchase Price Per Share $ 14.01 $ 15.01 $ 16.00 $ 16.25 $ 16.50 $ 16.75 $ 17.00 $ 17.25 $ 17.50
Memo: Premium to Undisturbed Price 0 % 7 % 14 % 16 % 18 % 20 % 21 % 23 % 25 %
Premium vs. Median Analyst Price Target $17.00 (18)% (12)% (6)% (4)% (3)% (1)% 0 % 1 % 3 %
Premium vs. 52-Week High $19.17 (27)% (22)% (17)% (15)% (14)% (13)% (11)% (10)% (9)%
Fully Diluted Shares Outstanding 124.0 124.0 124.0 124.0 124.0 124.0 124.0 124.0 124.0
Fully Diluted Equity Value $1,737 $1,861 $1,984 $2,015 $2,046 $2,077 $2,108 $2,139 $2,170
(+) Debt $ 1,845 $ 1,845 $ 1,845 $ 1,845 $ 1,845 $ 1,845 $ 1,845 $ 1,845 $ 1,845
(-) Cash $(27) $(27) $(27) $(27) $(27) $(27) $(27) $(27) $(27)
Enterprise Value $3,556 $3,680 $3,803 $3,834 $3,865 $3,896 $3,927 $3,958 $3,989
EV Increase Relative to $16/sh ($) $(247) $(123) $ 0 $ 31 $ 62 $ 93 $ 124 $ 155 $ 186
EV Increase Relative to $16/sh (%) (6)% (3)% 0 % 1 % 2 % 2 % 3 % 4 % 5 %
EV / EBITDA
Metric
Management Projections 2025A $ 493 7.2 x 7.5 x 7.7 x 7.8 x 7.8 x 7.9 x 8.0 x 8.0 x 8.1 x
2026E $ 531 6.7 x 6.9 x 7.2 x 7.2 x 7.3 x 7.3 x 7.4 x 7.5 x 7.5 x
Consensus 2025A $ 493 7.2 x 7.5 x 7.7 x 7.8 x 7.8 x 7.9 x 8.0 x 8.0 x 8.1 x
2026E $ 530 6.7 x 6.9 x 7.2 x 7.2 x 7.3 x 7.4 x 7.4 x 7.5 x 7.5 x
|
### EX-99.(C)(XI) - EXHIBIT 99.(C)(XI)
EX-99.(C)(XI)
11
tm2611660d2_ex99-cxi.htm
EXHIBIT 99.(C)(XI)
Exhibit 99.(c)(xi)
|
| Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Materials for the Special Committee
Goldman Sachs & Co. LLC
February 25th
, 2026
Goldman Sachs does not provide accounting, tax, or legal advice. Notwithstanding anything in this document to the contrary, and except as required to enable
compliance with applicable securities law, you (and each of your employees, representatives, and other agents) may disclose to any and all persons the US
federal income and state tax treatment and tax structure of the transaction and all materials of any kind (including tax opinions and other tax analyses) that are
provided to you relating to such tax treatment and tax structure, without Goldman Sachs imposing any limitation of any kind.
|
|
| 1
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Select Medical Top Buyers and Sellers
Q3 2025 to Q4 2025 | Share count in millions
Inbound Investors
Position Size
Delta
Investor Delta
(mm)
T. Rowe
Price +0.7
Western
Standard +1.0
0.6
(0.3)
(0.3)
1.0
1.2
1.0
0.9
0.8
0.8
0.4
0.3
(0.3)
(0.4)
(0.4)
(1.0)
(1.9)
0.7
(0.4)
(0.4)
(0.5)
New
Incr
Incr
New
Incr
Incr
Incr
New
Incr
New
Sold
Decr
Decr
Decr
Sold
Sold
Decr
Decr
Decr
Decr
(2.5) (2.0) (1.5) (1.0) (0.5) 0.5 1.0 1.5
Adage Capital Management, L.P.
Western Standard, LLC
Ortenzio (Robert A)
Eversept Partners, LP
Algert Global LLC
Woodline Partners LP
T. Rowe Price
Cambria Investment Management, L.P.
D. E. Shaw
Invenomic Capital Management LP
Point72 Asset Management, L.P.
Goldman Sachs & Company, Inc.
J.P. Morgan Securities LLC
Qube Research & Technologies Ltd
ExodusPoint Capital Management, LP
Smith, Graham & Co.
Nuveen LLC
Invesco Capital Management LLC
Millennium Mgm't
Principal Global Investors (Equity)
Index Quantitative Income Value GARP Growth
Hedge Fund International Momentum Sector Specific Specialty Pension
Strategic Broker Dealer Insurance Other
Sizes
Investor Position
Size (mm)
DE Shaw 2.2
Woodline 1.3
Adage 1.2
Total 4.7
3.8 %1
Source: Public filings
1 Total shares outstanding of 124.0mm basic shares and no dilutive securities per Select Medical 2025 10-K as of 01-Feb-2026.
Select Medical Share Ownership Change
Initiated or meaningfully increased position
Since the offer in November, 11.2mm shares have traded in excess
of the 3-month ADTV which represents 9.0% of total shares outstanding1
|
|
| 2
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Select Medical Implied Share Price
$ in millions except per share values
Source: FactSet as of 24-Feb-2026
1 Undisturbed date of 24-Nov-2025; debt, cash, and share count figures per Select Medical Management as of 30-Sept-2025; fully diluted shares outstanding reflects 120.5mm common shares and 3.0mm restricted shares
outstanding. 2 Debt and cash figures per Select Medical 2025 10-K as of 31-Dec-2025; share count per Select Medical 2025 10-K as of 01-Feb-2026, reflects 124.0mm basic shares outstanding and no dilutive securities. 3 Reflects
consensus NTM EBITDA multiple as of undistributed date of 24-Nov-2025.
Since the offer in November, 11.2mm shares have traded in excess
of the 3-month ADTV which represents 9.0% of total shares outstanding4
Consensus NTM EBITDA
Multiple 6.3 x Undist. NTM EBITDA
Multiple 6.3 x 3M Avg. NTM EBITDA
Multiple 6.2 x 6M Avg. NTM EBITDA
Multiple 6.2 x
Consensus NTM EBITDA $ 548 Current Consensus NTM
EBITDA $ 535 Current Consensus NTM
EBITDA $ 535 Current Consensus NTM
EBITDA $ 535
Enterprise Value $3,450 Enterprise Value $3,371 Enterprise Value $3,305 Enterprise Value $3,327
(-) Debt $ 1,780 (-) Debt $1,845 (-) Debt $1,845 (-) Debt $1,845
(+) Cash $ 60 (+) Cash $ 27 (+) Cash $ 27 (+) Cash $ 27
Equity Value $ 1,730 Equity Value $1,552 Equity Value $1,486 Equity Value $1,508
Fully Diluted Shares
Outstanding 123.5 Fully Diluted Shares
Outstanding 124.0 Fully Diluted Shares
Outstanding 124.0 Fully Diluted Shares
Outstanding 124.0
Undist. Share Price $ 14.01 Implied Share Price $12.51 Implied Share Price $11.99 Implied Share Price $12.16
Premium (Disc.) to
Undist. (10.7)% Premium (Disc.) to
Undist. (14.5)% Premium (Disc.) to
Undist. (13.2)%
Undisturbed1 Current2 3M Average2 6M Average2
3
Excel:
\\firmwide.corp.gs.com\ibdroot\projects\IBD-NY\sawbones2024\925030_1\Presentations\2025.11.XX
Pitch\Excel\Peers_TSR_2025YTD_5Dec2025.XLSM
|
|
| 3
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Select Medical Share Price Performance
Source: FactSet as of 24-Feb-2026
1 Assumes Select Medical share price performance since offer equivalent to that of associated peer. 2 Current share price as of 24-Feb-2026. 3 Acute Care Peers include Community Health Systems,
Tenet Healthcare, and Universal Health Services. 4 Alternative Site Healthcare includes RadNet, USPH, Surgery Partners, and BrightSpring.
Stock Price Performance Since Offer
S&P 500
Acute Care
Peers3
80%
85%
90%
95%
100%
105%
110%
115%
120%
125%
130%
24-Nov-2025 24-Dec-2025 24-Jan-2026 24-Feb-2026
4.8 %
2.8 %
5.8 %
(3.1)%
15.9 %
(7.2)%
Alternative
Site Peers4
Implied Select
Medical Share Price1
$16.24
$14.822
$14.69
$14.40
$13.57
$13.01
05-Feb-2026
Encompass reports
4Q 2025 earnings
22-Feb-2026
Consortium receives
revised offer
|
|
| Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Materials for the Special Committee
Goldman Sachs & Co. LLC
February 25
th
, 2026
Goldman Sachs does not provide accounting, tax, or legal advice. Notwithstanding anything in this document to the contrary, and except as required to enable
compliance with applicable securities law, you (and each of your employees, representatives, and other agents) may disclose to any and all persons the US
federal income and state tax treatment and tax structure of the transaction and all materials of any kind (including tax opinions and other tax analyses) that are
provided to you relating to such tax treatment and tax structure, without Goldman Sachs imposing any limitation of any kind.
|
|
| 1
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Would have strategics / sponsors on LHS that we
suggested for outreach
And then bifurcate RHS into 3 buckets: Interested / Not
interested / Awaiting feedback
First bucket would have no names
Encompass a pass
Speaking to United on Friday
Tenet encompass and HCA all no
LGP and KKR a no so far
Cd&r also a no
Illustrative Talking Points and Potential Q&A
◼ Talking points for Dan in call with Bob
— Thank you for your time the other day—it was very helpful for me and for us on the committee
— We met as a special committee yesterday to discuss your latest $16 offer, and formally concluded we won’t do a deal at that price
— However, we remain open to considering any improved proposal you have
— I want to remind you that we have studied value and continue to see value well in excess of your original range
— As I mentioned, several of our shareholders share that perspective and have proactively reached out to us to let us know
— I also appreciate that this is hard for you, but please remember this is incredibly hard for us on the SC. Doing a deal in and around your
original range just isn’t right for all our shareholders. [If appropriate: You yourself have acknowledged you wouldn’t sell at $16]
◼ Potential Q&A
— What is it going to take? I told you $17 isn’t ever going to happen. And, maybe I could get to a number a few pennies above our range,
but that was it. So, I hope you have thought about that as you answer my question
— Option 1: I heard you the other day about where you see value. And I hope you heard me also. I wasn’t negotiating; we think
any deal below $17 is incredibly hard. In that light, while we haven’t talked about exactly what number we would accept, nobody
on the Committee is comfortable in the low $16’s, and I don’t think we could have a more constructive Committee discussion
below the mid-$16’s
— Option 2: I heard you very clearly the other day, but I hope you heard me, too. Anything below $17 is hard for us. But at the
moment, you are at $16, I told you we are at $17. There is $60mm mid-way between those two points, which is a less than 2%
difference from your $16 proposal. If you can’t find $60mm, I doubt we could ever get comfortable. [If appropriate: I’m sure
WCAS will be tempted to chisel and test that, but I’m telling you Bob, you are better off getting there, or shutting this down]
— It’s not about $60mm, anything above $16/share would require me to find additional equity to fund this transaction and I don’t think that’s
feasible based on my conversations with WCAS. They are serious about not having any appetite to go further here
— I hear you, and I appreciate that color. However, I’d like to remind you again that my job on the special committee is to do what’s
in the best interest of our shareholders – if you’re telling me that based on what I’ve said that there’s not a deal to be done here,
I would understand that
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| 2
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Source: Management Projections, FactSet market data as of 25-Feb-2026; FDSO, cash, and debt per Select Medical public filings 1 As of unaffected date as of 24-Nov-2025.
Analysis at Various Prices
($ in millions, except per share data)
Premium
to Undist.1
Current
Price as of
25-Feb
Updated
Offer
Purchase Price Per Share $ 14.01 $ 14.90 $ 16.00 $ 16.25 $ 16.50 $ 16.75 $ 17.00 $ 17.25 $ 17.50
Memo: Premium to Undisturbed Price 0 % 6 % 14 % 16 % 18 % 20 % 21 % 23 % 25 %
Premium vs. Median Analyst Price Target $17.00 (18)% (12)% (6)% (4)% (3)% (1)% 0 % 1 % 3 %
Premium vs. 52-Week High $19.17 (27)% (22)% (17)% (15)% (14)% (13)% (11)% (10)% (9)%
Fully Diluted Shares Outstanding 124.0 124.0 124.0 124.0 124.0 124.0 124.0 124.0 124.0
Fully Diluted Equity Value $1,737 $1,848 $1,984 $2,015 $2,046 $2,077 $2,108 $2,139 $2,170
(+) Debt $ 1,845 $ 1,845 $ 1,845 $ 1,845 $ 1,845 $ 1,845 $ 1,845 $ 1,845 $ 1,845
(-) Cash $(27) $(27) $(27) $(27) $(27) $(27) $(27) $(27) $(27)
Enterprise Value $3,556 $3,667 $3,803 $3,834 $3,865 $3,896 $3,927 $3,958 $3,989
EV Increase Relative to $16/sh ($) $(247) $(136) $ 0 $ 31 $ 62 $ 93 $ 124 $ 155 $ 186
EV Increase Relative to $16/sh (%) (6)% (4)% 0 % 1 % 2 % 2 % 3 % 4 % 5 %
EV / EBITDA
Metric
Management Projections 2025A $ 493 7.2 x 7.4 x 7.7 x 7.8 x 7.8 x 7.9 x 8.0 x 8.0 x 8.1 x
2026E $ 531 6.7 x 6.9 x 7.2 x 7.2 x 7.3 x 7.3 x 7.4 x 7.5 x 7.5 x
Consensus 2025A $ 493 7.2 x 7.4 x 7.7 x 7.8 x 7.8 x 7.9 x 8.0 x 8.0 x 8.1 x
2026E $ 530 6.7 x 6.9 x 7.2 x 7.2 x 7.3 x 7.4 x 7.4 x 7.5 x 7.5 x
|
### EX-99.(C)(XII) - EXHIBIT 99.(C)(XII)
EX-99.(C)(XII)
12
tm2611660d2_ex99-cxii.htm
EXHIBIT 99.(C)(XII)
Exhibit 99.(c)(xii)
|
| Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Reference Materials for
Goldman Sachs & Co. LLC
February 28th, 2026
Goldman Sachs does not provide accounting, tax, or legal advice. Notwithstanding anything in this document to the contrary, and except as required to enable
compliance with applicable securities law, you (and each of your employees, representatives, and other agents) may disclose to any and all persons the US
federal income and state tax treatment and tax structure of the transaction and all materials of any kind (including tax opinions and other tax analyses) that are
provided to you relating to such tax treatment and tax structure, without Goldman Sachs imposing any limitation of any kind.
|
|
| 1
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Precedent Special Committee Bid Bump Analysis
Announced Date Target Acquirer Target Industry
Sector Initial Bid Final Bid Number of Bids From
Winning Bidder
Bump from Initial
to Final Bid % Increase Days Between Initial
and Final Bid
8-Dec-25 Confluent IBM Technology $ 27.00 $ 31.00 4 $ 4.00 15 % 12
22-Sep-25 Premier Patient Square Capital Business
Services $ 27.00 $ 28.25 3 $ 1.25 5 % 87
17-Oct-24 Zuora GIC, Silver Lake Technology $ 9.75 $ 10.00 2 $ 0.25 3 % 0
1-Aug-24 R1 RCM CD&R, Towerbrook Technology $ 13.25 $ 14.30 5 $ 1.05 8 % 29
13-May-24 Squarespace Permira Technology $ 40.50 $ 46.50 5 $ 6.00 15 % 206
2-Apr-24 Endeavor Group Holdings Silver Lake Business
Services $ 24.50 $ 27.50 4 $ 3.00 12 % 3
26-Feb-24 Agiliti Thomas H. Lee Partners Healthcare $ 9.00 $ 10.00 8 $ 1.00 11 % 133
18-Dec-23 Alteryx Clearlake, Insight Technology $ 41.50 $ 48.25 5 $ 6.75 16 % 57
23-Oct-23 EngageSmart Vista Equity Partners Technology $ 22.00 $ 23.00 3 $ 1.00 5 % 12
14-Mar-23 Cvent Blackstone Technology $ 8.00 $ 8.50 5 $ 0.50 6 % 111
27-Feb-23 Focus Financial Partners CD&R Financial
Services $ 45.00 $ 53.00 7 $ 8.00 18 % 165
9-Jan-23 Duck Creek Technologies Vista Equity Partners Technology $ 15.00 $ 19.00 4 $ 4.00 27 % 73
25-Jul-22 Shell Midstream Partners Shell Energy $ 12.89 $ 15.85 6 $ 2.96 23 % 148
11-May-22 Switch DigitalBridge Group, IFM Technology $ 34.00 $ 34.25 2 $ 0.25 1 % 56
11-Apr-22 SailPoint Technologies Thoma Bravo Business
Services $ 60.00 $ 65.25 4 $ 5.25 9 % 17
14-Feb-22 Cornerstone Building
Brands CD&R Industrial $ 22.00 $ 24.65 6 $ 2.65 12 % 90
12-Jul-21 State Auto Financial Liberty Mutual Financial
Services $ 43.00 $ 52.00 3 $ 9.00 21 % 273
18-Jun-21 Sykes Enterprises CREADEV Technology $ 53.00 $ 54.00 2 $ 1.00 2 % 33
6-May-21 At Home Group Hellman & Friedman Retail $ 32.00 $ 37.00 7 $ 5.00 16 % 97
Median 4 12 % 73
Source: Deal Point, public filings
Note: Includes friendly transactions with public target, special committee assignment for target, enterprise value greater than $1bn, 2021 – 2025, completed, all cash, US-only. For initial bids covering
a range of values, initial bid reflects low end of range.
|
### EX-99.(C)(XIII) - EXHIBIT 99.(C)(XIII)
EX-99.(C)(XIII)
13
tm2611660d2_ex99-cxiii.htm
EXHIBIT 99.(C)(XIII)
Exhibit 99.(c)(xiii)
|
| Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Discussion Materials for The Special Committee of
Goldman Sachs & Co. LLC
March 2026
Goldman Sachs does not provide accounting, tax, or legal advice. Notwithstanding anything in this document to the contrary, and except as required to enable
compliance with applicable securities law, you (and each of your employees, representatives, and other agents) may disclose to any and all persons the US
federal income and state tax treatment and tax structure of the transaction and all materials of any kind (including tax opinions and other tax analyses) that are
provided to you relating to such tax treatment and tax structure, without Goldman Sachs imposing any limitation of any kind.
|
|
| 1
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Offer
Purchase Price Per Share $ 16.50
Memo: Premium to Undisturbed Price (as of 24-Nov-2025) $14.01 18 %
Premium vs. 30-Day VWAP 1 $13.63 21 %
Premium vs. 60-Day VWAP 1 $13.29 24 %
Fully Diluted Shares Outstanding 124.0
Fully Diluted Equity Value $2,046
(+) Debt $ 1,845
(-) Cash $(27)
Enterprise Value $3,865
EV / EBITDA
Management Projections 2025A $ 493 7.8 x
2026E $ 531 7.3 x
Consensus 2025A $ 493 7.8 x
2026E $ 530 7.3 x
Source: Management Projections dated 23-Dec-2025, prepared by Select Medical management and approved for use by Goldman Sachs (“Management Projections”), reflects forecast through
2030 and extrapolations through 2035. FactSet market data as of 26-Feb-2026; Cash and debt per Select Medical public filings; FDSO per Select Medical management as of 28-Feb-2026 and
approved for use by Goldman Sachs 1 As of unaffected date, the last trading day prior to the announcement of a public offer after market-close on 24-Nov-2025.
Transaction Summary
($ in millions, except per share data)
|
|
| 2
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Source: Management Projections, Select Medical public filings
Select
Medical
Management
Forecast
Income
Statement
◼ Total top-line CAGR of 4.9% from 2026E-2030E, annual growth tapers to 2.0% by 2035E
◼ 230bps of EBITDA margin expansion from 2026E-2030E, margin tapers by 70bps by 2035E
◼ Key longer-term assumptions
— Revenue growth
– CIRH: increases from 1.1% in 2026E to 2.7% in 2030E, tapers to 2.0% by 2035E
– IRF: decreases from 8.8% in 2026E to 7.2% in 2030E, tapers to 2.0% by 2035E
– OP: increases from 5.7% in 2026E to 6.0% in 2030E, tapers to 2.0% by 2035E
— EBITDA margin
– CIRH: increases from 10.2% in 2026E to 11.1% in 2030E, tapers to 10.6% by 2035E
– IRF: increases from 21.5% in 2026E to 23.3% in 2030E, tapers to 22.4% by 2035E
– OP: increase from 8.8% in 2026E to 12.3% in 2030E, tapers to 10.3% by 2035E
— D&A steps down from 2.6% in 2026E to 1.9% of revenue by 2035E
Key Cash
Flow Items
◼ Change in net working capital as % of change in revenue increases from 8.2% in 2026E to 8.8% in 2030E-onward
◼ Assumes no additional M&A spend
◼ Capital expenditures decrease from $237mm in 2026E to $175mm in 2027E-onward
◼ 21% marginal tax rate
Balance Sheet ◼ Cash and cash equivalents of $27mm as of 31-Dec-2025
◼ Total debt of $1,845mm as of 31-Dec-2025
Share Count
◼ Fully diluted share count of 124.0mm as of 28-Feb-2026 per Select Medical Management
- Includes restricted shares of 3.4mm as of 28-Feb-2026 per Select Medical Management
Overview of Key Financial Assumptions
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| 3
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
$ 246 $ 302 $ 265 $ 256 $ 269 $ 283 $ 296 $ 311
$ 222 $ 246 $ 279 $ 301 $ 337 $ 375 $ 410 $ 112 $ 445
$ 109 $ 90 $ 120 $ 141 $ 160 $ 183 $ 209
$(134) $(146) $(141) $(146) $(150) $(154) $(159) $(163)
$ 446
$ 510 $ 493 $ 531
$ 597
$ 664
$ 730 $ 801
2023A 2024A 2025A 2026E 2027E 2028E 2029E 2030E
$ 2,300 $ 2,444 $ 2,478 $ 2,506 $ 2,577 $ 2,655 $ 2,719 $ 2,792
$ 980
$ 1,189
$ 1,111 $ 1,289 $ 1,402 $ 1,531 $ 1,664 $ 1,783 $ 1,912
$ 1,250 $ 1,285 $ 1,358 $ 1,430 $ 1,510 $ 1,603 $ 1,700
$ 358 $ 382 $ 401 $ 457 $ 469 $ 483 $ 497 $ 512
$ 4,826 $ 5,187 $ 5,453 $ 5,722 $ 6,007 $ 6,312 $ 6,602 $ 6,916
2023A 2024A 2025A 2026E 2027E 2028E 2029E 2030E
Source: Management Projections; Select Medical public filings
Revenue
WholeCo Growth - 7.5 % 5.1 % 4.9 % 5.0 % 5.1 % 4.6 % 4.8 %
CIRH Growth - 6.3 % 1.4 % 1.1 % 2.9 % 3.0 % 2.4 % 2.7 %
IRF Growth - 13.4 % 16.1 % 8.8 % 9.2 % 8.7 % 7.1 % 7.2 %
OP Growth - 5.2 % 2.8 % 5.7 % 5.3 % 5.6 % 6.1 % 6.0 %
Corporate Growth - 6.8 % 5.0 % 13.8 % 2.6 % 3.0 % 3.0 % 3.0 %
5.8 %
2026E – 2030E
CAGR
Adjusted
EBITDA
Select Medical’s Historical and Projected Financials
Management Projections | ($ in millions)
OP
2.7 %
WholeCo Growth 14.4 % (3.4)% 7.6 % 12.5 % 11.3 % 9.8 % 9.7 %
WholeCo Margin 9.2 % 9.8 % 9.0 % 9.3 % 9.9 % 10.5 % 11.1 % 11.6 %
CIRH Margin 10.7 % 12.3 % 10.7 % 10.2 % 10.4 % 10.7 % 10.9 % 11.1 %
IRF Margin 22.6 % 22.1 % 21.6 % 21.5 % 22.0 % 22.5 % 23.0 % 23.3 %
OP Margin 9.4 % 8.7 % 7.0 % 8.8 % 9.9 % 10.6 % 11.4 % 12.3 %
Corporate Margin (37.4)% (38.1)% (35.2)% (32.0)% (32.0)% (32.0)% (31.9)% (31.9)%
8.1 %
2026E – 2030E
CAGR
CIRH IRF
2.9 %
4.9 %
Corporate
14.9 %
5.0 %
10.3 %
10.8 %
\\firmwide.corp.gs.com\ibdroot\projects\IBD-NY\sapient2025\977110_1\Presentations\2. Fairness Opinion Presentation\Excel\Broker Perspectives
and Projections\Broker Perspectives and Projections_v02.xlsx
2.9 %
5.8 %
2025A – 2030E
CAGR
2.7 %
8.1 %
2025A – 2030E
CAGR
2.9%
4.9%
14.9 %
5.0%
10.3 %
10.8 %
2.9 %
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| 4
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Discounted
Cash Flow
Analysis
Management
Projections
◼ 10-Year DCF discounted to 31-Dec-2025
◼ 10.0% – 12.0% WACC
◼ 1.5% – 2.5% perpetuity growth rate
◼ Terminal D&A reflects 95% of capital expenditures
Present Value
of Future
Stock Price
Management
Projections
◼ 6.0x – 8.0x NTM EV / EBITDA
◼ Cost of equity: 12.2%
Precedent
Transactions
Analysis
Precedent
Healthcare
Transactions
◼ EBITDA range: 6.2x – 11.2x based on inpatient rehabilitation and long-term acute
care precedent transactions since 2009
◼ LTM adjusted EBITDA of $493mm as of 31-Dec-2025 per Select Medical
Management
Premia Paid
Analysis
Premium to
Undisturbed
Price of $14.01
◼ U.S. healthcare M&A transactions from $1 – $5bn in enterprise value since 2020,
cash-only
◼ Undisturbed price of $14.01 as of 24-Nov-2025
◼ 12% - 77% premia to undisturbed price (represents minimum to maximum)
Public Market
Perspectives
52-Week High
and Low
◼ 52-week low: 05-Aug-2025
◼ 52-week high: 29-Apr-2025
Forward Analyst
Price Targets
◼ Median: $17.00 per share
◼ Based on 5 analyst price targets
$ 15.04
$ 14.04
$ 9.99
$ 15.69
$ 11.77
$ 16.00
$ 25.33
$ 25.72
$ 29.87
$ 24.80
$ 18.41
$ 20.00
Summary of Illustrative & Preliminary Financial
Analyses
Methodology Equity Value per Share Comments
Offer: $ 16.50
A
B
D
Source: Management Projections, Select Medical public filings, Market data as of 27-Feb-2026
($ in millions, except per share data)
C
For Reference
oPV of FSP should be 15.20 – 22.28
The orange bubble should be undisturbed price of $14.01on page 19
oAdd a bullet the forward PTs which says CY2026E Consensus Median
EBITDA is [ ]% above current Management estimates
oLBO: Run the exit multiples at 6.5x – 8.0x with 7.25x at the midpoint
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|
| 5
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Source: Management Projections
Note: Cash flows are discounted to 31-Dec-2025 using mid-year convention 1 Assumes D&A is equal to 95% of capex in terminal year.
Discounted Cash Flow Analysis
($ in millions, except per share data) | Valuation as of 31-Dec-2025
A
Management Projections
Terminal
Value
$in millions 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E 2034E 2035E
Total Revenue $5,722 $6,007 $6,312 $6,602 $6,916 $ 7,209 $ 7,475 $ 7,710 $ 7,908 $ 8,066 $ 8,066
% Growth 5.0 % 5.1 % 4.6 % 4.8 % 4.2 % 3.7 % 3.1 % 2.6 % 2.0 %
Adj. EBITDA $ 531 $ 597 $ 664 $ 730 $ 801 $ 828 $ 848 $ 863 $ 871 $ 876 $ 876
% Margin 9.3 % 9.9 % 10.5 % 11.1 % 11.6 % 11.5 % 11.4 % 11.2 % 11.0 % 10.9 % 10.9 %
(-) Stock-Based Compensation (21) (23) (25) (28) (31) (31) (31) (31) (31) (31) (31)
EBITDA $ 510 $ 574 $ 639 $ 702 $ 770 $ 797 $ 818 $ 832 $ 840 $ 845 $ 845
% Margin 8.9 % 9.6 % 10.1 % 10.6 % 11.1 % 11.1 % 10.9 % 10.8 % 10.6 % 10.5 % 10.5 %
(-) Depreciation & Amortization (146) (150) (150) (150) (150) (150) (150) (150) (150) (150) (166)1
% of Revenue 2.6 % 2.5 % 2.4 % 2.3 % 2.2 % 2.1 % 2.0 % 2.0 % 1.9 % 1.9 % 2.1 %
EBIT $ 363 $ 423 $ 489 $ 551 $ 620 $ 646 $ 667 $ 682 $ 689 $ 694 $ 678
% Margin 6.4 % 7.0 % 7.7 % 8.4 % 9.0 % 9.0 % 8.9 % 8.8 % 8.7 % 8.6 % 8.4 %
(-) Taxes (76) (89) (103) (116) (130) (136) (140) (143) (145) (146) (142)
% Tax Rate 21 % 21 % 21 % 21 % 21 % 21 % 21 % 21 % 21 % 21 % 21 %
NOPAT $ 287 $ 334 $ 386 $ 436 $ 489 $ 511 $ 527 $ 539 $ 545 $ 548 $ 536
% Margin 5.0 % 5.6 % 6.1 % 6.6 % 7.1 % 7.1 % 7.1 % 7.0 % 6.9 % 6.8 % 6.6 %
(+) Distributions from Unconsolidated Subsidiaries 55 58 59 61 63 66 68 70 72 73 73
(-) Distribution to and Purchases of Non-Controlling Interests (78) (81) (83) (86) (88) (92) (95) (98) (101) (103) (103)
(+) Depreciation and Amortization 146 150 150 150 150 150 150 150 150 150 166
(-) Change in NWC (15) (19) (25) (27) (28) (26) (23) (21) (17) (14) (14)
(-) Capital Expenditures (237) (175) (175) (175) (175) (175) (175) (175) (175) (175) (175)
Unlevered Free Cash Flow $ 157 $ 268 $ 313 $ 360 $ 412 $ 434 $ 452 $ 465 $ 474 $ 480 $ 484
Implied Equity Value per Share
Perpetuity Growth Rate
20.4 x 1.5% 2.0% 2.5%
WACC
10.0% $ 22.60 $ 23.88 $ 25.33
11.0% $ 18.42 $ 19.36 $ 20.41
12.0% $ 15.04 $ 15.75 $ 16.54
Implied Terminal NTM EBITDA Multiple
Perpetuity Growth Rate
6.6 x 1.5% 2.0% 2.5%
WACC
10.0% 6.8 x 7.2 x 7.8 x
11.0% 6.1 x 6.5 x 6.9 x
12.0% 5.5 x 5.8 x 6.2 x
Implied Terminal Value as % of EV
Perpetuity Growth Rate
0.7 % 1.5% 2.0% 2.5%
WACC
10.0% 50.5 % 52.2 % 53.9 %
11.0% 46.7 % 48.2 % 49.8 %
12.0% 43.2 % 44.6 % 46.0 %
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| 6
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
$22.53
$24.48
$25.72
$18.29 $20.30
$21.67
$14.04
$16.11
$17.62
$ 14.01
$ 0
$ 5
$ 10
$ 15
$ 20
$ 25
$ 30
$ 35
$ 40
Dec-25 Dec-26 Dec-27 Dec-28
$25.01
$30.29
$35.54
$20.25
$25.02
$29.81
$15.49
$19.75
$24.09
$ 14.01
$ 0
$ 5
$ 10
$ 15
$ 20
$ 25
$ 30
$ 35
$ 40
Dec-25 Dec-26 Dec-27 Dec-28
Source: Management Projections, FactSet as of 27-Feb-2026
Note: Future value of stock price discounted to 31-Dec-2025 using SEM’s cost of equity of 12.2%. Balance sheet projections and free cash flow allocation per Management Projections. Includes
dividend per share of $0.25 each year discounted using mid-year convention.
B Present Value of Future Stock Price Analysis
Management Projections | ($ in millions, except per share data)
Valuation as of 31-Dec-2025
o Run the 3 year average excluding Concentra (like
from the earlier page and footnote this carefully – I think this will
enable us to support 6.5x – 7.5x
o The current multiple here should be re-labeled as
“Undisturbed” and be as of November 24, 2025 which we say is 6.1x
page 4. Would also flag we say undisturbed 2026E is 6.3x on page
20 based on consensus which I can’t quite tie to the 6.1x on page 4
NTM EBITDA ($mm) $ 597 $ 664 $ 730
Net Debt ($mm) 1,639 1,495 1,305
Present Value of Cumulative Dividends ($mm) 30 54 72
Fully Diluted Shares Outstanding 125.4 126.1 127.6
Future Value of Stock Price (Including Dividends) Present Value of Future Stock Price (Including Dividends)
Share Price ($)
Share Price ($)
NTM EV/EBITDA Multiple 6.0x 7.0x 8.0x
Undisturbed
Share Price
as of 24-Nov
EV / NTM EBITDA
Multiple:
Undisturbed: 6.3 x
1Y Average: 6.7 x
2Y Average: 7.7 x
Undisturbed
Share Price
as of 24-Nov
|
|
| 7
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
11.2 x
9.8 x
7.9 x 7.7 x
8.2 x 7.6 x
6.7 x 6.4 x
6.2 x
Kindred Healthcare
/ Centerre
Healthcare
Corporation
HealthSouth
Corporation /
Reliant Hospital
Partners
Genesis Healthcare
/ Revera
Kindred Healthcare
/ RehabCare
Group
Kindred Healthcare
WholeCo
Acquisition
Select Medical
Holdings
Corporation /
Regency Hospital
Company, L.L.C.
Kindred
Healthcare, Inc. /
Certain facilities
owned by Vista
Healthcare
Holdings, LLC
Vibra Healthcare,
LLC / Certain
facilities owned by
Kindred
Healthcare, Inc.
RehabCare Group,
Inc. / Triumph
HealthCare
Holdings, Inc.
($ in millions) | LTM EV / EBITDA
Source: Company filings and press releases
1 Includes $730mm cash purchase price and $210mm assumed lease obligations. 2 Kindred purchased 5 long-term acute care hospitals from Vista. 3 Vibra purchased 14 long-term acute care hospitals, 1
inpatient rehab hospital, and 1 skilled nursing facility from Kindred.
Acquirer
Target
Announcement
Date 12-Nov-14 11-Jun-15 15-Jun-15 8-Feb-11 19-Dec-17 21-Jun-10 24-Aug-10 25-Apr-13 3-Nov-09
Enterprise Value $ 195 $ 940 $ 240 $ 1,300 $ 4,100 $ 210 $ 180 $ 166 $ 575
Rehab Median: 8.9 x
Select Inpatient Rehabilitation and Long-Term
Acute Care Precedent Transactions
1
2 3
LTAC Median: 6.7 x
Combined Median: 7.7 x
Rehabilitation
Long-Term
Acute Care
C
TBU – adding Scion Health,
scrubbing incremental Deal Logic
run for additional names
|
|
| 8
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Precedent Premia Paid | 2020 – 2026 YTD
Source: FactSet as of 27-Feb-2026, Press releases, Company filings
Note: Excludes biotech & pharmaceutical transactions.
N = 18
Median: 28 %
Mean: 32 %
Max: 77 %
Min: 12 %
Precedent Premia Paid Analysis
One-Day Premium of U.S. Healthcare Deals | Cash Only | $1 - $5bn
0 0
3
7
5
0
1 1 1
0 0 0
100%
D
|
|
| 9
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
A Appendix
|
|
| 10
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Source: FactSet, Market data as of 27-Feb-2026
1 Proposal received 24-Nov-2025 after market close; stock price reaction reflects following trading day.
2 Updated proposal received on Sunday, 22-Feb-2026.
Select Medical’s Share Price Performance
Date
1 Day
Reaction Event
21-Feb-2025 (7.2)%
◼ Reports Q4 2024 earnings, beating revenue
by 2.4% but missing EBITDA by (0.2)%
driven by (6.0)% YoY decrease in LTACH
Adj. EBITDA resulting from start-up losses,
integration costs, and Hurricane Helene
◼ 2025 EBITDA guidance established at
$520mm – $540mm (vs. $548mm
consensus)
02-May-2025 (21.8)%
◼ Reports Q1 2025 Earnings, missing
revenue by (3.0)% and EBITDA by (7.4)%,
driven by underperformance of CIRH
segment given decreasing YoY quarterly
EBITDA and contracting margin
◼ 2025 EBITDA guidance lowered to $510mm
– $530mm (vs. $530mm consensus)
01-Aug-2025 (15.0)%
◼ Reports Q2 2025 earnings, missing revenue
by (0.1)% and missing EBITDA by (0.7)%,
driven by high-cost outlier thresholds in
CIRH and pending implementation of the
20% transmittal rule
◼ 2025 Net Income guidance lowered to
$141mm – $154mm (vs. $178mm
consensus)
08-Oct-2025 9.2 %
◼ RBC increases price target from $16 to $20,
maintains “outperform”, cites CMS’ decision
to delay implementation of 20% transmittal
rule, and notes attractive entry valuation
31-Oct-2025 (2.6)%
◼ Reports Q3 2025 earnings, beating revenue
by 2.3% and missing EBITDA by (1.9)%,
driven by heightened labor costs coupled
with unfavorable payer mix
◼ 2025 Net Income guidance increased
slightly to $143mm – $156mm (vs. $184mm
consensus)
25-Nov-20251
11.1 %
◼ Acknowledges receipt of non-binding
proposal from Executive Chairman Robert
Ortenzio to acquire all outstanding shares
for $16.00 to $16.20 per share in cash (the
“Proposal”)
20-Feb-2026 (6.7)%
◼ Reports Q4 2025 earnings, beating Q4
2025 revenue by 2.3% but missing on Adj.
EBITDA by (18.1)% largely driven by a
challenging Outpatient quarter
23-Feb-20262
(1.5)%
◼ Executive Chairman Robert Ortenzio
delivers updated non-binding proposal to
acquire all outstanding shares for $16.00
per share in cash
good
good
good
good
check
good
good
good
$ 5
$ 10
$ 15
$ 20
Feb-2025 May-2025 Aug-2025 Nov-2025 Feb-2026
Share Price
$ 14.97 1Y Average: $ 14.76
6M Average: $ 14.23
52-Week High: $ 18.41
52-Week Low: $ 11.77
SEM Price as of 24-Nov-25: $14.01 (Undisturbed)
SEM Price as of 25-Nov-25: $15.57
1
2
5
3
4
6
1
2
3
4
5
6
Stock Price Performance Over the Last Year
7
8
7 8
|
|
| 11
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
5.0 x
10.0 x
15.0 x
20.0 x
25.0 x
30.0 x
35.0 x
Jan-2025 Apr-2025 Jul-2025 Nov-2025 Feb-2026
9.5 x
6.9 x
15.8 x
6.5 x
14.4 x
Source: FactSet; Market data as of 27-Feb-2026
Note: Acute Care Peers include Community Health Systems, Tenet Healthcare, Universal Health Services. Alternative Site Healthcare Peers include RadNet, USPH, Surgery Partners, and
BrightSpring.
NTM EV / EBITDA | Last 5 Years
Select Medical’s NTM Valuation Multiple Over Time
Relative to Peers
03-Jan-2024
Select announces its intention to
spin off Concentra; stock has
traded up 42.0% and multiple has
traded up by 1.4x since then
Backup
\\firmwide.corp.gs.com\ibdroot\projects\IBD-NY\sawbones2024\925030_1\Presentations\2024.08.16 RemainCo
Analysis\Excel\NTM EV EBITDA_vMaster.xlsx
Select’s NTM EV / EBITDA
pro forma for Concentra
Separation: ~7.5x
NTM EV / EBITDA | Last 1 Year
\\firmwide.corp.gs.com\ibdroot\projects\IBD-NY\sapient2025\977110_1\Presentations\2. Fairness Opinion
Presentation\Excel\NTM EV
EBITDA_vMaster_06Jan2026_v02.xlsx WIP
Implied ex-Concentra Select Medical 5-year, 3-year, and 2-year average NTM EV / EBITDA
Multiples of 7.9x, 7.8x, and 7.5x respectively, assuming Concentra valued at 9.5x NTM EBITDA
6.7 x
10.1 x
15.8 x
|
|
| 12
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
$ 20.00 $ 19.00
$ 17.00 $ 16.20 $ 16.00
Benchmark RBC Mizuho DB UBS
Median: $17.00
Price as of 27-Feb-26: $14.97
Wall Street Outlook
($ in millions, except per share values)
Price Target
Source: Wall Street Research, FactSet as of 27-Feb-2026
Date 20-Feb-2026 22-Feb-2026 20-Feb-2026 20-Feb-2026 23-Feb-2026
2026E EBITDA $ 531 $ 510 $ 523 $ 528 $ 534
Buy
Hold
\\firmwide.corp.gs.com\ibdroot\projects\IBD-NY\sapient2025\977110_1\Presentations\2. Fairness Opinion Presentation\Excel\Broker Perspectives
and Projections\Broker Perspectives and Projections_v03.xlsx
“Our new price target of $16.20
(previously $20) reflects the upper limit
of the proposed cash purchase price by
the consortium”
|
|
| 13
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
One-Day Premium of U.S. Healthcare Deals | 2020 – 2026 YTD
Source: FactSet as of 27-Feb-2026
Note: Excludes biotech & pharmaceutical transactions.
Precedent Premia Paid Analysis
Cash Only | $1 - $5bn | $ in billions
TBU – Price update, show format
with lines across page showing
25th/75th percentile lines across page
Date Announced Target Acquiror Deal Value Premium Paid
9/22/2025 Premier Inc Patient Square Capital $ 2.6 30.5
8/5/2025 STAAR Surgical Alcon 1.5 51.0
1/6/2025 Inari Medical Inc Stryker Corp 4.7 60.7
12/11/2024 Patterson Cos Inc Patient Square Capital 2.8 35.7
6/18/2024 Silk Road Medical Inc Boston Scientific Corp 1.3 26.9
1/8/2024 Axonics Inc Boston Scientific Corp 3.7 23.3
6/5/2023 Amedisys Inc Optum Inc 3.7 30.7
7/21/2022 1Life Healthcare Inc Amazon.com Inc 3.5 76.8
7/21/2022 Hanger PSQ 1.2 25.8
5/20/2022 Covetrus TPG / CD&R 3.2 37.5
4/18/2022 Natus Medical Inc Prince Parent Inc 1.1 28.6
4/5/2022 Tivity Stone Point 1.9 28.2
1/10/2022 Apria Inc Owens & Minor Inc 1.5 26.2
1/6/2022 Vocera Stryker 2.7 26.8
4/11/2021 Luminex Corp DiaSorin SpA 1.8 12.3
3/15/2021 GenMark Diagnostics Inc Roche Holding AG 1.8 30.0
1/4/2021 Magellan Health Inc Centene Corp 1.9 14.7
12/18/2020 BioTelemetry Koninklikke Philips 2.8 16.5
Min 12.3 %
Median 28.4 %
Mean 32.3 %
Max 76.8 %
|
|
| 14
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
CIRH
Revenue
Growth (1)%
Increases from 1.1% to 2.7%
growth between 2026 and 2030.
Tapers to 2.0% by 2035E
+1 %
EBITDA
Margin
Remains flat at 2027
margin of 10.4% in
subsequent years
Increases from 10.2% to 11.1%
between 2026 and 2030, tapers to
10.6% by 2035E
+1 %
IRF
Revenue
Growth (1)%
Decreases from 8.8% to 7.2%
growth between 2026 and 2030.
Tapers to 2.0% by 2035E
+1 %
EBITDA
Margin (1)%
Increases from 21.5% to 23.3%
between 2026 and 2030, tapers to
22.4% by 2035E
+1 %
OP
Revenue
Growth (1)%
Increases from 5.7% to 6.0%
growth between 2026 and 2030.
Tapers to 2.0% by 2035E
+1 %
EBITDA
Margin
Remains flat at 2027
margin of 9.9% in
subsequent years
Increases from 8.8% to 12.3%
between 2026 and 2030, tapers to
10.3% by 2035E
+1 %
WholeCo
Revenue
Growth (1)%
Decreases from 4.9% to 4.8%
growth between 2026 and 2030,
annual growth tapers to 2.0% by
2035E
+1 %
EBITDA
Margin (1)%
Increases from 9.3% to 11.6%
between 2026 and 2030, tapers to
10.9% by 2035E
+1 %
Source: Management Projections
Note: Downside and upside flex values apply equally to each year in base case scenario unless otherwise noted.
Sensitivity Upside Case Equity Value per Share Sensitivity
Discounted Cash Flow Sensitivity
($ in millions, except per share data) | Base Case of $19.36 Per Share
Downside Case Base Case
$(1.15)
$(0.49)
$(1.86)
$(1.35)
$(0.70)
$(0.91)
$(4.25)
$(4.83)
$ 1.23
$ 1.93
$ 2.00
$ 1.35
$ 0.75
$ 1.20
$ 4.58
$ 4.83
|
|
| 15
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Target Capital Structure (%)
Gross Debt / (Cap) 20.0 %
Equity / (Cap) 80.0 %
Illustrative WACC Calculation
Risk-Free Rate 4.6 %
Equity Beta 1.25
Equity Risk Premium 6.1 %
Cost of Equity 12.2 %
Illustrative Pre-Tax Cost of Debt 7.0 %
After-Tax Return on Cash 2.9 %
WACC 10.9 %
Company Hist. Beta Market Cap Total Debt Total Cash Total Debt / Cap Cash / Cap Net Debt / Cap
Select Medical NM $ 1,857 $ 1,845 $ 27 50 % 1 % 49 %
Peers
BrightSpring 1.16 8,257 2,522 $ 88 24 % 1 % 23 %
Encompass 0.57 10,859 2,464 $ 145 19 % 1 % 18 %
Enovis 1.45 1,501 1,297 $ 36 47 % 1 % 46 %
Integra 1.70 908 1,856 $ 264 74 % 11 % 64 %
Radnet 1.16 5,403 1,096 $ 805 19 % 14 % 5 %
Surgery Partners 1.20 2,005 3,525 $ 203 66 % 4 % 62 %
UFP Technologies 1.48 1,624 135 $ 20 8 % 1 % 7 %
US Physical Therapy 1.16 1,261 162 $ 36 12 % 3 % 9 %
Median 1.18 $ 1,814 $ 1,576 $ 117 21 % 2 % 20 %
Average 1.23 $ 3,977 $ 1,632 $ 200 34 % 4 % 29 %
Illustrative Select Medical WACC Calculation
February 2026 | ($ in millions)
Assumptions Discount Rate Sensitivity Analysis
Source: Company Filings, Axioma Beta, Bloomberg as of 27-Feb-2026
Note: Tax rate of 21%
Peer Data
Equity Beta
1.15 1.25 1.35
25 % 10.1 % 10.5 % 11.0 %
Gross Debt to
Cap % 20 % 10.4 % 10.9 % 11.3 %
15 % 10.7 % 11.2 % 11.7 %
For internal reference only
|
|
| 16
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Total Equity Capitalization
Common Shares Outstanding (FDSO) 124,018,300
Memo: Restricted Shares (Counted in Common Shares) 3,356,460
Source: Per Select Medical Management and approved for use by Goldman Sachs, as of 28-Feb-2026
Total Shares Outstanding
|
|
| 17
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
7.6 x
6.0 x 5.7 x
4.7 x 4.2 x
DaVita Inc. Pediatrix Medical Group,
Inc.
Accendra Health Inc Fresenius Medical Care
AG
Ardent Health, Inc.
Steady State EBITDA Multiples for Selected Mature
Healthcare Companies
NTM EV / EBITDA
Source: FactSet as of 27-Feb-2026
2026E EBITDA Margin 20.5 % 14.9 % 13.1 % 18.6 % 7.8 %
CY2026-CY2028E Revenue CAGR 2.2 3.9 4.9 4.0 6.8
CY2026-CY2028E EBITDA CAGR 2.4 1.8 7.7 7.5 5.4
Last 1 Year Historical Average NTM
EV/EBITDA 8.5 x 6.7 x 5.5 x 6.2 x 6.4 x
Median: 5.7 x
\\firmwide.corp.gs.com\ibdroot\projects\IBD-NY\sapient2025\977110_1\Presentations\(2026.02.25) - Model Rollforward Pack\Excel\Steady state
Multiples\CSC for WACC Peers_v02.xlsx
|
|
| 18
Confidential, Preliminary & Highly Illustrative for Discussion Purposes
Disclaimer
\\firmwide.corp.gs.com\ibdroot\projects\IBD-NY\sapient2025\977110_1\Presentations\(2026.02.25) - Model Rollforward Pack\Excel\Steady state
Multiples\CSC for WACC Peers_v02.xlsx
These materials have been prepared and are provided by Goldman Sachs on a confidential basis solely for the information and assistance of the Special Committee of Select Medical
Holdings Corporation (the "Company") in connection with their consideration of the matters referred to herein. These materials and Goldman Sachs’ presentation relating to these
materials (the “Confidential Information”) may not be disclosed to the third party or circulated or referred to publicly or used for or relied upon for any other purpose without the prior
written consent of Goldman Sachs. The Confidential Information was not prepared with a view to public disclosure or to conform to any disclosure standards under any state, federal or
international securities laws or other laws, rules or regulations, and Goldman Sachs does not take any responsibility for the use of the Confidential Information by persons other than
those set forth above. Notwithstanding anything in this Confidential Information to the contrary, the Company may disclose to any person the US federal income and state income tax
treatment and tax structure of any transaction described herein and all materials of any kind (including tax opinions and other tax analyses) that are provided to the Company relating to
such tax treatment and tax structure, without Goldman Sachs imposing any limitation of any kind. The Confidential Information has been prepared by Goldman Sachs Investment Banking
and is not a product of Goldman Sachs Global Investment Research.
Goldman Sachs and its affiliates are engaged in advisory, underwriting and financing, principal investing, sales and trading, research, investment management and other financial and
non-financial activities and services for various persons and entities. Goldman Sachs and its affiliates and employees, and funds or other entities they manage or in which they invest or
have other economic interest or with which they co-invest, may at any time purchase, sell, hold or vote long or short positions and investments in securities, derivatives, loans,
commodities, currencies, credit default swaps and other financial instruments of the Company, any other party to any transaction and any of their respective affiliates or any currency or
commodity that may be involved in any transaction. Goldman Sachs Investment Banking maintains regular, ordinary course client service dialogues with clients and potential clients to
review events, opportunities, and conditions in particular sectors and industries and, in that connection, Goldman Sachs may make reference to the Company, but Goldman Sachs will not
disclose any confidential information received from the Company.
The Confidential Information has been prepared based on historical financial information, forecasts and other information obtained by Goldman Sachs from publicly available sources, the
management of the Company or other sources (approved for our use by the Company in the case of information from management and nonpublic information). In preparing the
Confidential Information, Goldman Sachs has relied upon and assumed, without assuming any responsibility for independent verification, the accuracy and completeness of all of the
financial, legal, regulatory, tax, accounting and other information provided to, discussed with or reviewed by us, and Goldman Sachs does not assume any liability for any such
information. Goldman Sachs does not provide accounting, tax, legal or regulatory advice.
Goldman Sachs has not made an independent evaluation or appraisal of the assets and liabilities (including any contingent, derivative or off-balance sheet assets and liabilities) of the
Company or any other party to any transaction or any of their respective affiliates and has no obligation to evaluate the solvency of the Company or any other party to any transaction
under any state or federal laws relating to bankruptcy, insolvency or similar matters. The analyses contained in the Confidential Information do not purport to be appraisals nor do they
necessarily reflect the prices at which businesses or securities actually may be sold or purchased. Goldman Sachs’ role in any due diligence review is limited solely to performing such a
review as it shall deem necessary to support its own advice and analysis and shall not be on behalf of the Company. Analyses based upon forecasts of future results are not necessarily
indicative of actual future results, which may be significantly more or less favorable than suggested by these analyses, and Goldman Sachs does not assume responsibility if future
results are materially different from those forecast.
The Confidential Information does not address the underlying business decision of the Company to engage in any transaction, or the relative merits of any transaction or strategic
alternative referred to herein as compared to any other transaction or alternative that may be available to the Company. The Confidential Information is necessarily based on economic,
monetary, market and other conditions as in effect on, and the information made available to Goldman Sachs as of, the date of such Confidential Information and Goldman Sachs
assumes no responsibility for updating or revising the Confidential Information based on circumstances, developments or events occurring after such date. The Confidential Information
does not constitute any opinion, nor does the Confidential Information constitute a recommendation to the Board, any security holder of the Company or any other person as to how to
vote or act with respect to any transaction or any other matter. The Confidential Information, including this disclaimer, are subject to, and governed by, any written agreement between the
Company, the Board and/or any committee thereof, on the hand, and Goldman Sachs, on the other hand. The Confidential Information does not address, nor does Goldman Sachs
express any view as to, the potential effects of volatility in the credit, financial and stock markets on the Company, any other party to any transaction or any transaction.
|
### EX-99.(C)(XIV) - EXHIBIT 99.(C)(XIV)
EX-99.(C)(XIV)
14
tm2611660d2_ex99-cxiv.htm
EXHIBIT 99.(C)(XIV)
Exhibit 99.(c)(xiv)
|
| 114:151:197 255:255:255 0:0:0
Brand Colors
A.
240:235:230 167:162:157 114:115:117
Brand Grays
B.
220:220:224 187:187:191
Background Grays
C.
253:243:173 184:208:245 242:203:231
153:224:217 245:208:206 198:233:189
Table Highlight
D.
E.
0:0:0 114:115:117
Table Borders
F.
Functional Data Colors
G. 194:23:10 243:196:63 57:128:37
Primary Sequence
9:44:97
114:151:197
166:66:140
21:151:136
224:115:26
117:55:173
176:48:48
189:140:0
105.55.14
97:122:39
9:107:96
59:124:222
64:37:56
145:87:196
9:74:171
143:106:4
107:20:20
199:97:172
55:71:19
59:26:89
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Theme Colors
Primary Sequence Secondary Shade Materials for the Special
Committee
Goldman Sachs & Co. LLC
March 2026
Goldman Sachs does not provide accounting, tax, or legal advice. Notwithstanding anything in this document to the contrary, and except as required to enable compliance with applicable securities law, you
(and each of your employees, representatives, and other agents) may disclose to any and all persons the US federal income and state tax treatment and tax structure of the transaction and all materials of any
kind (including tax opinions and other tax analyses) that are provided to you relating to such tax treatment and tax structure, without Goldman Sachs imposing any limitation of any kind.
PROPRIETARY & CONFIDENTIAL
|
|
| 1
114:151:197 255:255:255 0:0:0
Brand Colors
A.
240:235:230 167:162:157 114:115:117
Brand Grays
B.
220:220:224 187:187:191
Background Grays
C.
253:243:173 184:208:245 242:203:231
153:224:217 245:208:206 198:233:189
Table Highlight
D.
E.
0:0:0 114:115:117
Table Borders
F.
Functional Data Colors
G. 194:23:10 243:196:63 57:128:37
Primary Sequence
9:44:97
114:151:197
166:66:140
21:151:136
224:115:26
117:55:173
176:48:48
189:140:0
105.55.14
97:122:39
9:107:96
59:124:222
64:37:56
145:87:196
9:74:171
143:106:4
107:20:20
199:97:172
55:71:19
59:26:89
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Theme Colors
Primary Sequence Secondary Shade
80%
90%
100%
110%
120%
130%
140%
150%
160%
Nov-25 Dec-25 Jan-26 Feb-26 Mar-26
6.1 %
12.7 %
18.5 %
(4.7)%
27.0 %
(4.5)%
6.8 %
7.4 %
(0.6)%
Select Medical and Healthcare Services Peer Performance Has Been Mixed Since
November 2025…
Source: FactSet as of 09-Mar-2026 1 Reflects performance since 24-Nov-2025. 2 Acute Care includes HCA, THC, CYH, UHS, and ARDT. 3 Rehab includes EHC and ENSG. 4 Home Health and Infusion includes
ADUS, AVAH, OPCH, and EHAB. 5 Dialysis includes DVA and FME-DE. 6 Other Alternative Site Care includes CON, SGRY, USPH, RDNT, BTSG, BKD, PACS, and LMRI. 7 Payers includes UNH, ELV, CVS, CNC, HUM,
CI, and MOH.
PROPRIETARY & CONFIDENTIAL
Indexed Stock Price
\\firmwide.corp.gs.com\ibdroot\projects\IBD-NY\sapient2025\977110_1\Presentations\(2026.03.03) - Market and Sector
Update\_Excel\Peers TSR 03.04.2026 v1.XLSM
1
02-Mar-2026
Select Medical announces
acquisition by consortium
Performance % LTM Since Offer 3M 2M 1M YTD
Select Medical (7.6)% 16.5 % 9.7 % 7.2 % 16.5 % 9.9 %
S&P 500 17.8 % 1.4 % (0.7)% (2.4)% 1.4 % (0.7)%
S&P 500 HC 5.2 % (0.2)% 3.3 % (1.9)% (0.2)% (0.3)%
Acute Care Peers2 29.6 % 2.1 % 5.8 % 8.8 % 2.1 % 9.5 %
Rehab3 35.8 % 5.9 % 11.7 % 14.1 % 5.9 % 12.5 %
Home Health and Infusion4 35.7 % (0.3)% (3.0)% (0.7)% (0.3)% 3.5 %
Dialysis5
(1.7)% 10.5 % 15.0 % 17.0 % 10.5 % 14.0 %
Other Alternative Site Care6 57.8 % 5.5 % 6.8 % (1.6)% 5.5 % 1.3 %
Payers7
(25.1)% (4.8)% (6.8)% (15.2)% (4.8)% (10.8)%
Last two weeks
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80%
85%
90%
95%
100%
105%
110%
115%
120%
125%
23-Feb-26 26-Feb-26 1-Mar-26 4-Mar-26 7-Mar-26
(14.1)%
(5.6)%
10.4 %
(3.6)%
(2.7)%
(0.6)%
…With Market Volatility Returning Over the Past Two Weeks
Source: Wall Street Research, FactSet as of 09-Mar-2026
1 Published on Sunday, 22-Feb-26; 23-Feb-26 reflects first trading day following publication. 2 S&P 500 volatility calculated as 3-month option-implied.
PROPRIETARY & CONFIDENTIAL
\\firmwide.corp.gs.com\ibdroot\projects\IBD-NY\sapient2025\977110_1\Presentations\(2026.03.03) - Market and Sector
Update\_Excel\Peers TSR 03.04.2026 v1.XLSM
Indexed Stock Price Commentary
Date Event
22-Feb-261
▪ Citrini publishes article on potential economic
downturn driven by AI-induced white-collar job
displacement published
26-Feb-26
▪ US Physical Therapy reports Q4 2025 earnings
▪ Stock falls (2.9)% against sales beat of 1.1% and
EBITDA miss of (0.2)% amidst reimbursement
pressures
28-Feb-26 ▪ US enters war in Middle East
03-Mar-26 ▪ Global bond markets tumble on inflation fears
03-Mar-26
▪ Surgery Partners reports Q4 2025 earnings
▪ Stock falls (12.3)% against sales beat of 2.2% and
EBITDA miss of (6.6)% amidst unfavorable payer mix
shift and cautious 2026 outlook
05-Mar-26 ▪ China sets lower economic 2026 growth target of
4.5-5.0%
05-Mar-26
▪ Ardent reports Q4 2025 earnings
▪ Stock falls (2.1)% against sales miss of (1.4)% and
EBITDA beat of 2.6% amidst weaker 2026 guidance
and ongoing business model pressures related to
denials and labor costs
06-Mar-26
▪ Trump demands “unconditional surrender” from Iran
▪ Oil prices surge as shipments through Strait of
Hormuz threatened; brent crude settles at over $92 a
barrel on Friday, up nearly 30% over the past week
and representing largest weekly rise since Apr 2020
▪ February 2026 jobs report shows jobs cuts of 92,000
and 4.4% unemployment
A C H
Performance % YTD 2W 1W
Select Medical 9.9 % 10.4 % 8.3 %
S&P 500 (0.7)% (0.6)% (1.2)%
S&P 500 HC (0.3)% (2.7)% (2.7)%
U.S. Physical Therapy 3.2 % (3.6)% (3.0)%
Surgery Partners (13.9)% (14.1)% (16.2)%
Ardent 3.9 % (5.6)% (3.3)%
A
C
D
F
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E
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Earnings Date1 1-Day Stock Price Reaction Beat/Miss 2026 EBITDA
Absolute Relative to S&P 500 Revenue EBITDA Guidance Consensus Pre-Announcement
Guidance vs.
Consensus Pre-Ann.
2-Feb-26 21.2 % 22.0 % 3.3 % 3.6 % - $ 2,828 -
11-Feb-26 17.3 % 17.3 % 1.0 % 2.7 % $ 4,635 $ 4,628 0.1 %
4-Feb-26 13.8 % 15.1 % (0.4)% 5.1 % - $ 672 -
2-Mar-26 7.7 % 7.7 % 5.8 % 4.2 % - $ 352 -
27-Jan-26 7.1 % 6.7 % (0.8)% 2.0 % $ 16,000 $ 15,887 0.7 %
5-Feb-26 5.9 % 3.9 % 0.5 % 7.3 % $ 1,360 $ 1,354 0.4 %
18-Feb-26 5.4 % 5.7 % (1.2)% 0.5 % $ 1,415 $ 1,534 (7.7)%
27-Feb-26 3.2 % 3.7 % 5.2 % 3.5 % $ 775 $ 707 9.7 %
26-Feb-26 1.4 % 1.8 % 1.1 % 4.7 % $ 460 $ 461 (0.2)%
4-Mar-26 (2.1)% (0.8)% (1.4)% 2.6 % $ 510 $ 522 (2.2)%
25-Feb-26 (2.9)% (2.3)% 1.1 % (0.2)% $ 104 $ 104 -
24-Feb-26 (6.3)% (7.1)% 0.1 % 0.2 % $ 493 $ 497 (0.9)%
19-Feb-26 (6.7)% (7.4)% 2.3 % (18.1)% $ 530 $ 550 (3.6)%
24-Feb-26 (7.5)% (8.3)% 1.5 % 4.0 % - $ 3,725 -
18-Feb-26 (9.7)% (9.5)% (2.0)% 0.0 % $ 509 $ 509 0.0 %
23-Feb-26 (10.6)% (11.3)% 0.1 % 2.7 % - $ 195 -
25-Feb-26 (11.4)% (10.9)% (0.4)% (1.0)% $ 2,715 $ 2,690 0.9 %
2-Mar-26 (12.3)% (11.4)% 2.2 % (6.6)% $ 530 $ 596 (11.1)%
26-Feb-26 (12.4)% (12.0)% (1.0)% 15.2 % $ 565 $ 543 4.1 %
Recent Healthcare Services Earnings Performance Has Been Mixed
PROPRIETARY & CONFIDENTIAL
▪ RHS – annotations around earnings reactions for those
names, make sure to cover the following for each peer
‐ 1D stock price reaction (absolute and vs. S&P500)
‐ Most recent quarter (and FY if applicable) reported vs.
consensus
‐ FY guidance vs. consensus
‐ Any other material updates in commentary (e.g.,
Elevance disclosed sanctions from CMS)
Healthcare Services Q4 2025 Earnings Performance
\\firmwide.corp.gs.com\ibdroot\projects\IBD-NY\sapient2025\977110_1\Presentations\(2026.03.03) - Market and Sector Update\_Excel\Beat Miss
Summary v03.04.2026 v2.xlsx
Source: Public filings, press releases, FactSet 1 Davita, Ensign, Encompass, Community Health, Concentra, Select Medical, Brookdale, Addus, Surgery Partners, and PACS reported post-close; 1-day reaction
reflects following trading day.
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Select Medical Quarterly Beats/Misses Over Past Three Years
$ in millions
Source: Public filings, FactSet 1 Represents reported EBITDA for fiscal year. 2 Proforma for
Concentra divestiture. 3 Includes contribution from Concentra.
PROPRIETARY & CONFIDENTIAL
Actuals Consensus Beat / Miss CY EBITDA
1-Day
Stock
Reaction
1-Week
Stock
Reaction
Revenue
Adj.
EBITDA Revenue
Adj.
EBITDA Revenue
Adj.
EBITDA
Guidance
(Midpoint)
Consensus
(Pre-Earnings
Release)
Guidance vs.
Consensus
2023
Q1 2023 $ 1,665 $ 214 $ 1,652 $ 186 0.8 % 14.9 % $ 800 $ 801 (0.1)% 6.0 % 0.8 %
Q2 2023 1,675 219 1,653 211 1.3 % 3.9 % $ 810 $ 804 0.7 % (1.6)% (0.3)%
Q3 2023 1,666 194 1,632 187 2.1 % 3.6 % $ 810 $ 811 (0.1)% (3.0)% (1.3)%
Q4 2023 1,659 180 1,641 183 1.1 % (1.8)% $ 8071
$ 811 (0.5)% 9.8 % 5.0 %
2024
Q1 2024 1,789 262 1,745 223 2.5 % 17.6 % $ 865 $ 851 1.6 % 10.5 % 14.7 %
Q2 2024 1,760 226 1,746 222 0.8 % 2.2 % $ 865 $ 874 (1.0)% (12.8)% (13.0)%
Q3 2024 1,761 205 1,740 196 1.2 % 4.9 % $ 875 $ 871 0.5 % 12.1 % 13.3 %
Q4 2024 1,313 116 1,282 116 2.4 % (0.2)% $ 5101,2 $ 8433
NM (7.2)% (5.2)%
2025
Q1 2025 1,353 151 1,395 164 (3.0)% (7.4)% $ 520 $ 530 (2.0)% (21.8)% (17.8)%
Q2 2025 1,340 125 1,341 126 (0.1)% (0.7)% $ 520 $ 520 (0.0)% (15.0)% (11.9)%
Q3 2025 1,363 112 1,333 114 2.3 % (1.9)% $ 520 $ 519 0.2 % (2.6)% (3.2)%
Q4 2025 $ 1,397 $ 105 $ 1,365 $ 128 2.3 % (18.1)% $ 4931
$ 516 (4.5)% (6.7)% (8.4)%
\\firmwide.corp.gs.com\ibdroot\projects\IBD-NY\sapient2025\977110_1\Presentations\(2026.03.03) - Market and Sector
Update\_Excel\Beat Miss Summary v03.04.2026 v2.xlsx
Stock price reaction muted by presence
of public take-private proposal
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$5
$10
$15
$20
$25
Mar-2021 Mar-2022 Mar-2023 Mar-2024 Mar-2025 Mar-2026
$ 16.25
1m VWAP: 3m VWAP:
6m VWAP:
52w Low:
12m VWAP:
9m VWAP:
Select Medical Share Price Performance Over Last Five Years
Source: FactSet as of 09-Mar-2026 1 Proposal received 24-Nov-2025 after market close; stock price reaction reflects following trading day. 2 Acquisition announced 02-Mar-2026 after
market close; stock price reaction reflects following trading day.
PROPRIETARY & CONFIDENTIAL
Share Price Performance Commentary
Date
1 Day
Reaction Event
21-Jun-21 2.9 %
▪ Announces acquisition of Acuity Healthcare, including four
LTAC hospitals as well as joint ventures with AtlantiCare, Mon
Health, and Virtua Health
06-Aug-21 (4.6)%
▪ Reports Q2 2021 earnings, beating revenue estimates by
10.3% and EBITDA by 68.1% ; sell-off driven by concerns
about one-time nature of CARES provider relief
06-May-22 3.6 % ▪ Reports Q1 2022 results, beating revenue estimates by 2.7%
and EBITDA estimates by 11.8%
24-Feb-23 (7.9)%
▪ Reports full-year 2022 results, beating revenue estimates by
0.5% but missing EBITDA by (10.3)%; sell-off driven by
cautious 2023 guidance and labor cost headwinds
03-Jan-24 (1.8)% ▪ Announces that the Board of Directors has formally agreed to
pursue a spin-off of Concentra Group Holdings
23-Feb-24 9.8 %
▪ Reports Q4 2023 results, beating revenue estimates by 1.1%
but missing EBITDA by (1.8)%, share price reaction driven by
more attractive go-forward labor cost outlook
03-May-24 10.5 %
▪ Reports Q1 2024 results, beating revenue estimates by 2.5%
and EBITDA by 17.6%, driven by a significant moderation in
salary, wage, and benefits expenses
25-Jul-24 1.6 % ▪ Concentra begins trading on the NYSE under the ticker CON
02-Aug-24 (12.8)%
▪ Reports Q2 2024 results, beating revenue estimates by 0.8%
and beating EBITDA by 2.2%; selloff driven by elevated
operating expenses and Concentra IPO uncertainty
01-Nov-24 12.1 % ▪ Reports Q3 2024 results, beating revenue estimates by 1.2%
and beating EBITDA by 4.9% and raising 2024 guidance
25-Nov-24 (2.4)% ▪ Completes tax-free distribution of Concentra shares to Select
Medical shareholders
02-May-25 (21.8)%
▪ Reports Q1 2025 earnings, missing revenue by (3.0)% and
missing EBITDA by (7.4)%, driven by a downward revision to
2025 guidance driven by the High-Cost Outlier threshold and
20% transmittal rule
01-Aug-25 (15.0)%
▪ Reports Q2 2025 results, missing revenue estimates by (0.1)%
and EBITDA by (0.7)% driven by CIRH margin compression
and rising labor expenses
31-Oct-25 (2.6)%
▪ Reports Q3 2025 earnings, beating revenue by 2.3% and
missing EBITDA by (1.9)%, driven by heightened labor costs
coupled with unfavorable payer mix
25-Nov-251 11.1 % ▪ Acknowledges receipt of non-binding proposal from
Executive Chairman Robert Ortenzio
28-Jan-26 (1.3)% ▪ CMS announces MA and Part D advance rate notice of 0.7%,
below consensus expectations of 4 – 5%
21-Feb-25 (6.7)%
▪ Reports Q4 2025 results, beating revenue estimates by 2.3%
but missing EBITDA by (18.1)% driven by outpatient margin
compression
03-Mar-262 8.4 % ▪ Announces acquisition by buyer consortium
14
15
15
18
18
14
16
16
3
12
12
3
-Jun-21 Acuity
and enter new joint ventures, adding 7 critical illness
-through-partnership model.
May-22
Jan-24 spin-off of
, its occupational health segment, to
-Jul-24
-Nov-24 -Off Completion -
-Dec-25 Landmark Hospital of Savannah
-
-Feb-26
Mar-26 -Private Deal
Executive Chairman Robert Ortenzio and
for $16.50 per share in cash.
Mar-26 ~8.4%
5
5
8
8
11
11
4
4
2
2
1 1
6
7
9
10
13
17
Date
1 Day
n Event
1 1 -Jun- 2.9 % four LTAC hospitals as well as joint ventures with
AtlantiCare, Mon Health, and Virtua Health
2 2
-Aug
21 (4.6)% by 10.3% and EBITDA by 68.1% ; sell-off driven by
concerns about one-time nature of CARES provider
relief fund payments and labor cost trend
3 3
-May
22 3.6 % Reports Q1 2022 results, beating revenue estimates
by 2.7% and EBITDA estimates by 11.8%
4 4 -Feb- (7.9)%
Reports full-year 2022 results, beating revenue
estimates by 0.5% but missing EBITDA by (10.3)%;
sell-off driven by cautious 2023 guidance and labor
cost headwinds
5 5 -Jan- (1.8)%
Announces that the Board of Directors has formally
agreed to pursue a spin-off of Concentra Group
Holdings
- 6 -Feb- 9.8 %
Reports Q4 2023 results, beating revenue estimates
by 1.1% but missing EBITDA by (1.8)%, share price
reaction driven by more attractive go-forward labor
cost outlook
- 7
-May
24 10.5 %
Reports Q1 2024 results, beating revenue estimates
by 2.5% and EBITDA by 17.6%
moderation in salary, wage, and benefits expenses
6 8 -Jul- 1.6 % Concentra begins trading on the NYSE under the
ticker CON
- 9
-Aug
24
Reports Q2 2024 results, beating revenue estimates
by 0.8% and beating EBITDA by 2.2%; selloff driven
by elevated operating expenses and Concentra IPO
uncertainty
- 10 -Nov
24 12.1 %
Reports Q3 2024 results, beating revenue estimates
by 1.2% and beating EBITDA by 4.9% and raising
2024 guidance
7 11 -Nov
24 (2.4)% Completes tax-free distribution of Concentra shares
to Select Medical shareholders
8 12 -May
25
Reports Q1 2025 earnings, missing revenue by
and missing EBITDA by (7.4)%
revision to 2025 guidance driven by the High-Cost
Outlier threshold and 20% transmittal rule
- 13 -Aug
25
Reports Q2 2025 results, missing revenue estimates
by (0.1)% and EBITDA by (0.7)% driven by CIRH
margin compression and rising labor expenses
9 14 -Oct- (2.6)%
Reports Q3 2025 earnings, beating revenue by 2.3%
and missing EBITDA by (1.9)%, driven by heightened
labor costs coupled with unfavorable payer mix
10 15 -Nov
251 11.1 % Acknowledges receipt of non-binding proposal from
Executive Chairman Robert Ortenzio
11 16 -Jan- (1.3)% 0.7%, below consensus expectations of 4 – 5%
- 17 -Feb- (6.7)%
Reports Q4 2025 results, beating revenue estimates
by 2.3% but missing EBITDA by (18.1)% driven by
outpatient margin compression
12 18 -Mar
262 8.4 % Announces acquisition by buyer consortium
6
7
9 10
13
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PROPRIETARY & CONFIDENTIAL
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Select Medical Guidance vs. Street Consensus Over Past Three Years
Source: Select Medical Management, FactSet as of 03-Mar-2026 1 Proforma for Concentra divestiture. 2 Includes contribution from Concentra.
PROPRIETARY & CONFIDENTIAL
FY Guidance
FY Median Consensus
(Pre-Earnings Release) Guidance Midpoint Higher / Lower by %
Revenue Adj. EBITDA Revenue Adj. EBITDA Revenue Adj. EBITDA
2023
Q4 2022 $ 6,500 - $ 6,700 - $ 6,658 $ 831 (0.9)% -
Q1 2023 $ 6,500 - $ 6,700 $ 780 - $ 820 $ 6,602 $ 801 (0.0)% (0.1)%
Q2 2023 $ 6,550 - $ 6,700 $ 795 - $ 825 $ 6,601 $ 804 0.4 % 0.8 %
Q3 2023 $ 6,550 - $ 6,700 $ 795 - $ 825 $ 6,621 $ 811 0.1 % (0.1)%
FY 2023A $ 6,664 $ 807 $ 6,646 $ 811
2024
Q4 2023 $ 6,900 - $ 7,100 $ 830 - $ 880 $ 6,809 $ 877 2.8 % (2.5)%
Q1 2024 $ 6,900 - $ 7,100 $ 845 - $ 885 $ 6,996 $ 851 0.1 % 1.6 %
Q2 2024 $ 6,900 - $ 7,100 $ 845 - $ 885 $ 7,017 $ 874 (0.2)% (1.0)%
Q3 2024 $ 6,950 - $ 7,150 $ 865 - $ 885 $ 7,029 $ 871 0.3 % 0.5 %
FY 2024A $ 5,1871 $ 5101 $ 6,8092 $ 8432
2025
Q4 2024 $ 5,400 - $ 5,600 $ 520 - $ 540 $ 5,377 $ 548 2.3 % (3.2)%
Q1 2025 $ 5,300 - $ 5,500 $ 510 - $ 530 $ 5,485 $ 530 (1.6)% (2.0)%
Q2 2025 $ 5,300 - $ 5,500 $ 510 - $ 530 $ 5,404 $ 520 (0.1)% (0.0)%
Q3 2025 $ 5,300 - $ 5,500 $ 510 - $ 530 $ 5,398 $ 519 0.0 % 0.2 %
FY 2025A $ 5,453 $ 493 $ 5,420 $ 516
Management Guidance Median Consensus Relative to Consensus
Memo: FY 2026E $ 5,700 $ 530 $ 5,681 $ 530 0.3 % -
$ in millions
Indicates guidance midpoint was raised QoQ
Indicates guidance midpoint was lowered QoQ
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220:220:224 187:187:191
Background Grays
C.
253:243:173 184:208:245 242:203:231
153:224:217 245:208:206 198:233:189
Table Highlight
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E.
0:0:0 114:115:117
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F.
Functional Data Colors
G. 194:23:10 243:196:63 57:128:37
Primary Sequence
9:44:97
114:151:197
166:66:140
21:151:136
224:115:26
117:55:173
176:48:48
189:140:0
105.55.14
97:122:39
9:107:96
59:124:222
64:37:56
145:87:196
9:74:171
143:106:4
107:20:20
199:97:172
55:71:19
59:26:89
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Disclaimer
These materials have been prepared and are provided by Goldman Sachs on a confidential basis solely for the information and assistance of the Special Committee of Select Medical
Holdings Corporation (the "Company") in connection with their consideration of the matters referred to herein. These materials and Goldman Sachs’ presentation relating to these
materials (the “Confidential Information”) may not be disclosed to the third party or circulated or referred to publicly or used for or relied upon for any other purpose without the prior
written consent of Goldman Sachs. The Confidential Information was not prepared with a view to public disclosure or to conform to any disclosure standards under any state, federal
or international securities laws or other laws, rules or regulations, and Goldman Sachs does not take any responsibility for the use of the Confidential Information by persons other than
those set forth above. Notwithstanding anything in this Confidential Information to the contrary, the Company may disclose to any person the US federal income and state income tax
treatment and tax structure of any transaction described herein and all materials of any kind (including tax opinions and other tax analyses) that are provided to the Company relating
to such tax treatment and tax structure, without Goldman Sachs imposing any limitation of any kind. The Confidential Information has been prepared by Goldman Sachs Investment
Banking and is not a product of Goldman Sachs Global Investment Research.
Goldman Sachs and its affiliates are engaged in advisory, underwriting and financing, principal investing, sales and trading, research, investment management and other financial and
non-financial activities and services for various persons and entities. Goldman Sachs and its affiliates and employees, and funds or other entities they manage or in which they invest or
have other economic interest or with which they co-invest, may at any time purchase, sell, hold or vote long or short positions and investments in securities, derivatives, loans,
commodities, currencies, credit default swaps and other financial instruments of the Company, any other party to any transaction and any of their respective affiliates or any currency
or commodity that may be involved in any transaction. Goldman Sachs Investment Banking maintains regular, ordinary course client service dialogues with clients and potential clients
to review events, opportunities, and conditions in particular sectors and industries and, in that connection, Goldman Sachs may make reference to the Company, but Goldman Sachs
will not disclose any confidential information received from the Company.
The Confidential Information has been prepared based on historical financial information, forecasts and other information obtained by Goldman Sachs from publicly available sources,
the management of the Company or other sources (approved for our use by the Company in the case of information from management and non-public information). In preparing the
Confidential Information, Goldman Sachs has relied upon and assumed, without assuming any responsibility for independent verification, the accuracy and completeness of all of the
financial, legal, regulatory, tax, accounting and other information provided to, discussed with or reviewed by us, and Goldman Sachs does not assume any liability for any such
information. Goldman Sachs does not provide accounting, tax, legal or regulatory advice.
Goldman Sachs has not made an independent evaluation or appraisal of the assets and liabilities (including any contingent, derivative or off-balance sheet assets and liabilities) of the
Company or any other party to any transaction or any of their respective affiliates and has no obligation to evaluate the solvency of the Company or any other party to any transaction
under any state or federal laws relating to bankruptcy, insolvency or similar matters. The analyses contained in the Confidential Information do not purport to be appraisals nor do they
necessarily reflect the prices at which businesses or securities actually may be sold or purchased. Goldman Sachs’ role in any due diligence review is limited solely to performing such a
review as it shall deem necessary to support its own advice and analysis and shall not be on behalf of the Company. Analyses based upon forecasts of future results are not necessarily
indicative of actual future results, which may be significantly more or less favorable than suggested by these analyses, and Goldman Sachs does not assume responsibility if future
results are materially different from those forecast.
The Confidential Information does not address the underlying business decision of the Company to engage in any transaction, or the relative merits of any transaction or strategic
alternative referred to herein as compared to any other transaction or alternative that may be available to the Company. The Confidential Information is necessarily based on
economic, monetary, market and other conditions as in effect on, and the information made available to Goldman Sachs as of, the date of such Confidential Information and Goldman
Sachs assumes no responsibility for updating or revising the Confidential Information based on circumstances, developments or events occurring after such date. The Confidential
Information does not constitute any opinion, nor does the Confidential Information constitute a recommendation to the Board, any security holder of the Company or any other person
as to how to vote or act with respect to any transaction or any other matter. The Confidential Information, including this disclaimer, are subject to, and governed by, any written
agreement between the Company, the Board and/or any committee thereof, on the hand, and Goldman Sachs, on the other hand. The Confidential Information does not address, nor
does Goldman Sachs express any view as to, the potential effects of volatility in the credit, financial and stock markets on the Company, any other party to any transaction or any
transaction.
PROPRIETARY & CONFIDENTIAL
|
### EX-99.(D)(X) - EXHIBIT 99.(D)(X)
EX-99.(D)(X)
15
tm2611660d2_ex99-dx.htm
EXHIBIT 99.(D)(X)
Exhibit 99.(d)(x)
EXECUTION VERSION
March 2, 2026
To:
Stallion Intermediate Corporation
c/o Welsh, Carson, Anderson & Stowe
599 Lexington Avenue, Suite 1800
New York, New York 10022
Attention: Ting Gu
Greetings:
This letter agreement (this
“ Agreement ”) sets forth the commitment (the “ Commitment ”) of WCAS XIV, L.P., a Delaware limited
partnership (the “ Fund ”), to purchase, directly or indirectly, in each case, on the terms and subject to the conditions
contained herein, certain equity securities of Stallion Intermediate Corporation, a Delaware corporation (“ Parent ”),
or make capital contributions to Parent on the terms and subject to the conditions contained herein. It is contemplated that pursuant
to that certain Agreement and Plan of Merger (as amended, restated, supplemented or otherwise modified from time to time, the “ Merger
Agreement ”) dated as of the date hereof, by and among Parent, Stallion Merger Sub Corporation, a Delaware corporation and wholly
owned subsidiary of Parent (“ Merger Sub ”), and Select Medical Holdings Corporation, a Delaware corporation (the “ Company ”),
Merger Sub will merge with and into the Company, with the Company as the surviving corporation (the “ Contemplated Transaction ”).
Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to such terms in the Merger Agreement (to the
extent such terms are defined therein).
1. Commitments .
The Fund hereby commits (the “ Commitment ”) to purchase, or to cause one or more of its Affiliates to purchase, at or
prior to the Closing, directly or indirectly, on the terms and subject to the conditions set forth herein, equity securities of Parent
for an aggregate purchase price equal to the $880,000,000 (the “ Commitment Amount ”), solely for the purpose of funding,
and to the extent necessary to fund, all amounts required to be paid by Parent as of the Closing pursuant to Sections 4.2(a) and
4.3 of the Merger Agreement, together with any related fees and expenses Parent is required to pay at the Closing pursuant to the terms
of the Merger Agreement (the “ Aggregate Required Amount ”); provided that, in no event will the Fund and/or its
permitted assignees have any obligation under any circumstance to contribute to, purchase equity securities of, or otherwise provide funds
to, Parent in excess of the Commitment Amount (and in no event will the Fund (together with its permitted assigns), be under any obligation
under any circumstances to provide an aggregate amount of funds of more than the Aggregate Required Amount). The amount to be funded by
the Fund under this Agreement will be reduced (on a dollar-for-dollar basis) at or immediately prior to Closing solely in the event that
Parent does not require all of the Commitment to pay the Aggregate Required Amount by reason of Parent having obtained funds from other
sources (including cash on hand, debt financing sources or any rollover and/or equity co-investment) that are readily available to Parent
to pay all amounts required to be paid by Parent as of the Closing pursuant to Sections 4.2(a) and 4.3 of the Merger Agreement, together
with any related fees and expenses Parent is required to pay at the Closing pursuant to the terms of the Merger Agreement.
2. Conditions .
The Fund’s obligation to fund the Commitment shall be subject to the following conditions: (a) all of the conditions set forth
in Sections 8.1 and 8.2 of the Merger Agreement have been and continue to be satisfied or waived (other than those that, by their nature,
are to be satisfied at the Closing; provided that those conditions could be satisfied if the Closing were to occur), (b) the
Company has irrevocably confirmed by written notice to Parent that (x) all conditions set forth in Section 8.3 of the Merger
Agreement have been satisfied (other than those that, by their nature, are to be satisfied at the Closing) or that they would be willing
to waive any unsatisfied conditions in Section 8.3 of the Merger Agreement and (y) that the Company is ready, willing, and able
to consummate the Closing if specific performance is granted and the Debt Financing were funded, (c) the Debt Financing has been
funded or will be funded at the Closing (in each case, in accordance with the terms and conditions thereof), and (d) the substantially
simultaneous consummation of the Closing in accordance with the terms of the Merger Agreement.
3. Acknowledgement .
The Fund acknowledges and agrees that if the conditions described in Section 2 above are satisfied, the Company may seek specific
performance of the Fund’s obligation to fund the Commitment hereunder pursuant to (and on the terms and subject to the conditions
of) Section 10.5 of the Merger Agreement (the “ Specific Performance Right ”).
4. Confidentiality .
This Agreement shall be treated as confidential and is being provided to Parent solely in connection with the Contemplated Transaction.
This Agreement may not be used, circulated, delivered, quoted or otherwise referred to in any document (other than the Merger Agreement
and the Limited Guaranty by the Fund, dated on or about the date hereof (the “ Limited Guaranty ”), and any debt financing
documentation) by the Company or any other third party beneficiary hereunder or its respective Affiliates except with the prior written
consent of Parent and the Fund in each instance; provided , that no such written consent is required for any disclosure of this
Agreement to (a) the extent required by applicable Law (or the rules of any stock exchange or self-regulatory organization)
or in connection with the enforcement of rights under this Agreement, the Merger Agreement or the transactions contemplated hereby and
thereby or (b) representatives of Parent, the Company or the Fund who need to know of the existence of this Agreement in connection
with the transactions contemplated hereby so long as such representatives agree to keep such information confidential on terms substantially
identical to the terms contained in this Section 4 .
5. Representations
and Warranties . The Fund hereby represents and warrants to Parent that (a) it has all requisite limited partnership or similar
power and authority to execute, deliver and perform this Agreement, (b) the execution, delivery and performance of this Agreement
by the Fund has been duly and validly authorized and approved by all necessary organizational action by it, (c) this Agreement has
been duly and validly executed by the Fund and (assuming due execution and delivery of this Agreement and the Merger Agreement by all
the other parties hereto and thereto) constitutes a legal, valid and binding obligation of the Fund, enforceable against the Fund in accordance
with its terms, subject to the Bankruptcy and Equity Exception, (d) the Fund (or its relevant Affiliate) will have uncalled capital
commitments or has other available funds in excess of the Commitment Amount hereunder plus the aggregate amount of all other commitments
and obligations it currently has outstanding, and (e) the execution, delivery and performance by the Fund of this Agreement do not
violate the Fund’s agreement of limited partnership or other organizational documents.
2
6. Parties
in Interest; Enforceability . This Agreement shall only be binding upon the parties hereto and their respective successors and permitted
assigns. This Agreement is not intended to, and does not, confer upon any other Person any benefits, rights or remedies; provided
that (a) the Company shall have the right to seek specific performance to cause the Fund to fund an amount up to the Commitment Amount
to Parent as described in Section 3 of this Agreement and (b) each Non-Recourse Party (as defined below) may rely upon
and enforce the provisions of Section 13 hereof. Neither Parent’s creditors (other than the Company to the extent provided
herein) nor any Person claiming by, through or on behalf or for the benefit of Parent or the Company, or any Affiliate shall have any
right to enforce this Agreement or to cause Parent to enforce this Agreement. The Company hereby agrees that the Specific Performance
Right shall be the sole and exclusive remedy with respect to any breach by the Fund of this Agreement and that, other than as expressly
contemplated by the Limited Guaranty, it may not seek or accept any other form of relief that may be available for breach of this Agreement
(including monetary, punitive, indirect, special, consequential or any other damages or remedies).
7. Amendment .
Except as set forth in Section 12 , no amendment, modification or waiver of any provision of this Agreement will be enforceable
unless approved in writing by Parent, the Fund and the Company.
8. Termination .
This Agreement and all obligations of the Fund to fund the Commitment will terminate automatically and immediately upon the earliest to
occur of (a) the Closing (at which time all such obligations shall be discharged), (b) the assertion by the Company or any of
its Affiliates (other than any Rollover Holder) of any claim against the Fund or any Non-Recourse Party (other than claims (i) against
the Fund pursuant to, and in accordance with, this Agreement, (ii) against Parent pursuant to, and in accordance with, the Merger
Agreement, (iii) against the Fund pursuant to the Confidentiality Agreement, and (iv) against the Fund pursuant to, and in accordance
with, the Limited Guaranty), (c) payment of the Parent Termination Fee pursuant to the Merger Agreement or the Limited Guaranty,
or (d) the valid termination of the Merger Agreement in accordance with its terms. Upon termination of this Agreement, neither the
Fund nor any of its respective assigns shall have any further obligations or liabilities hereunder, but such termination shall not relieve
the Fund of any of its obligations under the Limited Guaranty. Notwithstanding anything set forth in this Section 8 , Section 4 ,
and Sections 7 through 14 shall survive indefinitely (subject to the applicable statute of limitations) following the termination
of this Agreement.
9. Headings;
Construction . The descriptive headings contained in this Agreement are for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Agreement. The language used in this Agreement shall be deemed to be the language
chosen by the parties to express their mutual intent, and no rule of strict construction shall be applied against any Person.
3
10. Governing
Law and Venue; Waiver of Jury Trial . The provisions of Section 10.4 ( Governing Law and Venue; Waiver of Jury Trial ) and
10.12 ( Interpretation and Construction ) of the Merger Agreement are incorporated herein mutatis mutandis as if fully set
forth herein and made a part of this Agreement.
11. Entire
Agreement; Integration . Together with the Merger Agreement, the Limited Guaranty and the Confidentiality Agreement, this Agreement
constitutes the entire agreement of Parent, the Fund and the Company with respect to the subject matter hereof, and supersedes all prior
agreements and understandings, both written or oral, between the Fund or any of its Affiliates, on the one hand, and Parent or any of
its Affiliates, on the other, with respect to the subject matter hereof.
12. No
Assignment . Neither this Agreement nor any Commitment evidenced by this Agreement shall be assignable without the prior written consent
of Parent, the Fund and the Company; provided , however , that, without the consent of the Company, the Fund may assign all
or any portion of the Commitment Amount hereunder to any Affiliate of the Fund or any other Person providing equity financing to Parent;
provided , however , that any such assignment shall not relieve the Fund of its obligations hereunder unless and to the extent
actually performed. Any purported assignment of this Agreement or all or any portion of the Commitment Amount in contravention of this
Section 12 shall be void.
13. No
Recourse against Affiliates, etc . Notwithstanding anything that may be expressed or implied in this Agreement, by their acceptance
hereof each of Parent and the Company covenants, acknowledges and agrees for themselves and their respective Affiliates, that (a) no
Person other than the Fund (and its successors and assignees) shall have any obligation hereunder, (b) notwithstanding that the Fund
is a limited partnership, no recourse hereunder or under any documents or instruments delivered in connection herewith may be sought or
had against any Non-Recourse Party, whether by the enforcement of any judgment or assessment or by any legal or equitable proceeding or
by virtue of any statute, regulation or other applicable Law, and (c) no liability whatsoever will attach to, be imposed on or otherwise
be incurred by any Non-Recourse Party in connection with this Agreement or any documents or instrument delivered in connection herewith
or in respect of any oral representations made or alleged to be made in connection herewith or therewith for any obligation of the Fund
under this Agreement or in connection with the Commitment, or any claim (whether at law or equity or in tort, contract or otherwise) based
on, in respect of, or by reason of this Agreement or the Commitment; provided , however , that nothing in this Section 13
is intended or shall be construed to limit the obligations of the Guarantor under the Limited Guaranty or Parent under the Merger Agreement.
Notwithstanding anything to the contrary herein, this Section 13 shall survive the termination of this Agreement. For the
purposes of this Agreement, “ Non-Recourse Party ” means, with respect to any party to this Agreement, any of such party’s
former, current and future equity holders, controlling persons, directors, officers, employees, agents, representatives, Affiliates, members,
managers, general or limited partners, or assignees (or any former, current or future equity holder, controlling person, director, officer,
employee, agent, representative, Affiliate, member, manager, general or limited partner, or assignee of the foregoing); provided ,
that for the avoidance of doubt, no party to this Agreement shall be considered a Non-Recourse Party.
4
14. Counterparts .
This Agreement may be executed in one or more counterparts, all of which shall constitute one and the same instrument. Any such counterpart,
to the extent delivered by means of electronic transmission (including by pdf, .tif, .gif, .jpeg or similar attachment to electronic mail
(any such delivery, an “ Electronic Delivery ”)) shall be treated in all manner and respects as an original executed
counterpart and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered
in person. At the request of a party, the other party shall re-execute the original form of this Agreement and deliver such form to such
requesting party. No party shall raise the use of Electronic Delivery to deliver a signature or the fact that any signature or agreement
or instrument was transmitted or communicated through the use of Electronic Delivery as a defense to the formation of a contract, and
each such party forever waives any such defense. Minor variations in the form of the signature page, including footers from earlier versions
of this Agreement or any such other document, will be disregarded in determining a party’s intent or the effectiveness of such signature.
15. Relationships
of the Parties . Each party acknowledges and agrees that (a) this Agreement is not intended to, and does not, create any agency,
partnership, fiduciary or joint venture relationship between any of the parties hereto and neither this Agreement nor any other document
or agreement entered into by any party hereto relating to the subject matter hereof shall be construed to suggest otherwise and (b) the
obligations of the Fund under this Agreement are solely contractual in nature.
[ Remainder of this page intentionally left
blank – signature page follows ]
5
|
Sincerely, |
|
|
|
WCAS XIV, L.P. |
|
|
|
By: WCAS XIV Associates LLC |
|
Its: General Partner |
|
|
|
By: |
/s/ Jennifer Martin |
|
Name: |
Jennifer Martin |
|
Title: |
Managing Member |
[ Signature
Page to Equity Commitment Letter ]
Agreed to and accepted:
STALLION INTERMEDIATE CORPORATION |
|
|
|
By: |
/s/ Ting Gu |
|
Name: |
Ting Gu |
|
Title: |
Vice President and Secretary |
|
[ Signature
Page to Equity Commitment Letter ]
### EX-99.(D)(XI) - EXHIBIT 99.(D)(XI)
EX-99.(D)(XI)
16
tm2611660d2_ex99-dxi.htm
EXHIBIT 99.(D)(XI)
Exhibit 99.(d)(xi)
EXECUTION VERSION
LIMITED GUARANTY
This
Limited Guaranty (this “ Limited Guaranty ”), by WCAS XIV, L.P., a Delaware limited partnership (the “ Guarantor ”),
is made in favor of Select Medical Holdings Corporation, a Delaware corporation (the “ Company ” or the “ Guaranteed
Party ”), as of March 2, 2026. Reference is hereby made to that certain Agreement and Plan of Merger (as amended,
restated, supplemented or otherwise modified from time to time, the “ Merger Agreement ”) dated on or about the date
hereof, by and among the Company, Stallion Intermediate Corporation, a Delaware corporation (“ Parent ”), and Stallion
Merger Sub Corporation, a Delaware corporation and wholly owned subsidiary of Parent (“ Merger Sub ”), pursuant to which,
on the terms and subject to the conditions set forth therein, Merger Sub will merge with and into the Company, with the Company as the
surviving company. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to such terms in the Merger
Agreement (to the extent such terms are defined therein).
1. GUARANTY .
To induce the Guaranteed Party to enter into the Merger Agreement, the Guarantor hereby absolutely, unconditionally and irrevocably guarantees
to the Guaranteed Party, on the terms, limitations and conditions set forth herein, the due and punctual payment of the Parent Termination
Fee and the Additional Obligations if, as and when those obligations become payable under the Merger Agreement up to an aggregate amount
not to exceed the Cap (as defined below) (the “ Guaranteed Obligations ”). All payments hereunder shall be made in lawful
money of the United States, in immediately available funds.
Notwithstanding anything
to the contrary in this Limited Guaranty, the Merger Agreement or any of the other Transaction Documents (as defined below) or otherwise,
the Guaranteed Party hereby agrees that in no event shall the Guarantor be required to pay any amount to the Guaranteed Party or any
other Person under, in respect of, or in connection with this Limited Guaranty in excess of $143,009,627 (the “ Cap ”).
The parties hereto agree that this Limited Guaranty may not be enforced against the Guarantor without giving effect to the Cap (and to
the provisions of Sections 7 and 8 hereof).
If Parent fails to discharge
any of the Guaranteed Obligations when due, upon the Guaranteed Party’s demand the Guarantor’s liability to the Guaranteed
Party hereunder in respect of such Guaranteed Obligations (up to the Cap) shall become immediately due and payable, and the Guaranteed
Party may at any time and from time to time, at the Guaranteed Party’s option, and so long as Parent has failed to discharge such
Guaranteed Obligations, take any and all actions available hereunder to collect the Guarantor’s liabilities hereunder in respect
of such Guaranteed Obligations, subject to the Cap.
In furtherance of the foregoing,
the Guarantor acknowledges that the Guaranteed Party may, in its sole discretion, bring and prosecute a separate action or actions against
the Guarantor for unsatisfied amounts of the Guaranteed Obligations (subject to the Cap), regardless of whether any such action is brought
against Parent or whether Parent is joined in any such action or actions; provided , however , that in the event that multiple
actions are brought, the aggregate recovery in respect of all such actions shall not exceed the Cap.
2. NATURE
OF GUARANTY . The liability of the Guarantor hereunder is absolute, unconditional, irrevocable and continuing irrespective of any
modification, amendment or waiver of or any consent to departure from the Merger Agreement that may be agreed to by Parent in accordance
with the terms of the Merger Agreement. Without limiting the foregoing, the Guaranteed Party shall not be obligated to file any claim
relating to the Guaranteed Obligations in the event that Parent becomes subject to a bankruptcy, reorganization or similar proceeding,
and the failure of the Guaranteed Party to so file shall not affect the Guarantor’s obligations hereunder (subject to the Cap).
This Limited Guaranty is a guarantee of payment and not of collection.
3. CHANGES
IN OBLIGATIONS, CERTAIN WAIVERS . The Guarantor agrees that the Guaranteed Party may, in its sole discretion, at any time and from
time to time, without notice to or further consent of the Guarantor, extend the time of payment of any Guaranteed Obligation, and may
also enter into any agreement with Parent for the extension, renewal, payment, compromise, discharge or release thereof, in whole or
in part, without in any way impairing or affecting the Guarantor’s obligations under this Limited Guaranty or affecting the validity
or enforceability of this Limited Guaranty.
Subject to termination of
this Limited Guaranty as provided herein, the Guarantor agrees that its obligations hereunder shall not be released or discharged, in
whole or in part, or otherwise affected by: (a) the failure or delay on the part of the Guaranteed Party to assert any claim or
demand or to enforce any right or remedy against Parent or the Guarantor; (b) any change in the time, place or manner of payment
of the Guaranteed Obligations, or any waiver, compromise, consolidation or other amendment or modification of any of the terms or provisions
of the Merger Agreement made in accordance with the terms thereof; (c) any change in the legal existence, structure or ownership
of Parent or any other Person now or hereafter liable with respect to the Guaranteed Obligations; (d) any insolvency, bankruptcy,
reorganization or other similar proceeding instituted by or against Parent or any other Person now or hereafter liable with respect to
the Guaranteed Obligations; or (e) the adequacy or potential adequacy of any alternative means the Guaranteed Party may have of
obtaining payment related to the Guaranteed Obligations.
The Guarantor waives promptness,
diligence, notice of the acceptance of this Limited Guaranty and of the Guaranteed Obligations, presentment, demand for payment, notice
of non-performance, default, dishonor and protest, notice of any Guaranteed Obligation incurred and all other notices of any kind (other
than notices to Parent pursuant to the Merger Agreement or hereunder pursuant to the terms of this Limited Guaranty), all defenses which
may be available by virtue of any stay, moratorium or other similar Law now or hereafter in effect or any right to require the marshaling
of assets of Parent or any other Person now or hereafter liable with respect to the Guaranteed Obligations. The Guarantor acknowledges
that it will receive substantial direct and indirect benefits from the Merger and that the waivers set forth in this Limited Guaranty
are knowingly made in contemplation of such benefits.
- 2 -
The Guarantor hereby unconditionally
waives any rights that it may now have or hereafter acquire against Parent that arise from the existence, payment, performance, or enforcement
of the Guarantor’s obligations under or in respect of this Limited Guaranty, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of the Guaranteed Party
against Parent, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without
limitation, the right to take or receive from Parent, directly or indirectly, in cash or other property or by set-off or in any other
manner, payment or security on account of such claim, remedy or right, and the Guarantor shall not exercise any such rights in each case
unless and until the Guaranteed Obligations (which shall be subject to the Cap) shall have been indefeasibly paid in full. If any amount
shall be paid to the Guarantor in violation of the immediately preceding sentence at any time prior to the payment in full of the Guaranteed
Obligations (which shall be subject to the Cap), such amount shall be received and held in trust for the benefit of the Guaranteed Party,
shall be segregated from other property and funds of the Guarantor and shall forthwith be promptly paid or delivered to the Guaranteed
Party in the same form as so received (with any necessary endorsement or assignment) to be credited and applied to payment of the Guaranteed
Obligations until paid in full (subject to the Cap).
Notwithstanding anything
to the contrary contained in this Limited Guaranty or otherwise, the Guaranteed Party hereby agrees that, in addition to any defenses
of the Guarantor under this Limited Guaranty, the Guarantor shall have all defenses to the payment of its obligations under this Limited
Guaranty (which in any event shall be subject to the Cap) that would be available to Parent or any assignee in respect of the Merger
Agreement with respect to the Guaranteed Obligations (other than defenses arising from the insolvency, bankruptcy or similar proceeding
with respect to Parent), as well as any defenses in respect of any fraud or willful misconduct on the part of the Guaranteed Party or
any of its Affiliates.
Notwithstanding anything
to the contrary contained in this Limited Guaranty, any payment made by or on behalf of Parent to the Guaranteed Party with respect to
the Guaranteed Obligations shall reduce the total obligations of the Guarantor under this Limited Guaranty.
4. REPRESENTATIONS
AND WARRANTIES .
The Guarantor hereby represents
and warrants to the Guaranteed Party that, as of the date hereof:
(a) it
is a validly existing entity in good standing under its jurisdiction of organization; it has the requisite limited partnership power
and authority to execute, deliver and perform this Limited Guaranty; and the execution, delivery and performance of this Limited Guaranty
by the Guarantor (i) has been duly authorized by all necessary action on behalf of the Guarantor and (ii) does not and will
not conflict with or result in any violation of or contravene any provision of the Guarantor’s partnership agreement, operating
agreement or similar organizational documents or any applicable Law, decree, order, judgment or material contract binding on the Guarantor
or any of its property or assets;
(b) all
consents, approvals, or authorizations of, and all filings with and notifications to, any Governmental Entity necessary for the due execution,
delivery and performance of this Limited Guaranty by the Guarantor have been obtained or made and all conditions thereof have been duly
complied with by the Guarantor, and no other action by, and no notice to or filing with, any Governmental Entity or regulatory body is
required in connection with the execution, delivery or performance of this Limited Guaranty by the Guarantor;
- 3 -
(c) assuming
the due execution and delivery of the Merger Agreement by all parties thereto (other than Parent) and of this Limited Guaranty by the
Guaranteed Party, this Limited Guaranty constitutes a legal, valid and binding obligation of the Guarantor enforceable against the Guarantor
in accordance with its terms, except as enforceability may be limited by the Bankruptcy and Equity Exception; and
(d) the
Guarantor has the financial capacity to pay and perform its obligations under this Limited Guaranty, and all funds necessary for the
Guarantor to fulfill its obligations under this Limited Guaranty (whether via capital commitments or available unrestricted funds) shall
be available to the Guarantor for so long as this Limited Guaranty shall remain in effect in accordance with Section 7 hereof,
in each case subject to the Cap.
The Guaranteed Party hereby
represents and warrants that:
(a) it
is a validly existing entity in good standing under its jurisdiction of organization; it has all the requisite corporate, partnership,
limited liability company or other applicable power and authority to execute, deliver and perform this Limited Guaranty, and the execution,
delivery and performance of this Limited Guaranty (i) has been duly authorized by all necessary action on behalf of the Guaranteed
Party and (ii) does not and will not conflict with or result in any violation of or contravene any provision of the Guaranteed Party’s
organizational documents or any applicable Law, decree, order, judgment, material contract binding on such Guaranteed Party or any of
its property or assets;
(b) all
consents, approvals or authorizations of, and all filings with and notifications, to any Governmental Entity necessary for the due execution,
delivery and performance of this Limited Guaranty by the Guaranteed Party have been obtained or made and all conditions thereof have
been duly complied with by the Guaranteed Party, and no other action by, and no notice to or filing with, any Governmental Entity or
regulatory body is required in connection with the execution, delivery or performance of this Limited Guaranty by the Guaranteed Party;
and
(c) assuming
the due execution and delivery of the Merger Agreement by all parties thereto (other than the Guaranteed Party) and of this Limited Guaranty
by the Guarantor, this Limited Guaranty constitutes a legal, valid and binding obligation of the Guaranteed Party enforceable against
such Guaranteed Party in accordance with its terms, except as enforceability may be limited by the Bankruptcy and Equity Exception.
5. NO
ASSIGNMENT . Neither the Guarantor nor the Guaranteed Party may assign, transfer or delegate its rights, interests or obligations
under or in connection with this Limited Guaranty, in whole or in part, to any other Person (except by operation of applicable Law) without
the prior written consent of the Guaranteed Party (in the case of an assignment, transfer or delegation by the Guarantor) or the Guarantor
(in the case of an assignment, transfer or delegation by the Guaranteed Party) and any purported assignment, transfer or delegation without
such consent shall be null and void ab initio ; provided , however , that the Guarantor may assign, transfer or delegate
all or part of its rights, interests and obligations hereunder, without the prior written consent of the Guaranteed Party, to one or
more of its Affiliates, one or more investment funds sponsored or managed by the Guarantor or one or more of its Affiliates, or any other
Person to which it has allocated all or a portion of its investment commitment to Parent pursuant to the Equity Commitment Letter (as
defined below); provided , further , that no such assignment, transfer or delegation shall relieve the Guarantor of any of
its obligations hereunder.
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6. NOTICES .
All notices, demands and other communications to be given or delivered under or by reason of the provisions of this Limited Guaranty
shall be in writing and shall be deemed to have been duly given and effective when personally delivered, one day after deposit with Federal
Express or similar overnight courier service, upon transmission by electronic mail if successfully transmitted during normal business
hours and, if not, the next Business Day after successful transmission or three days after being mailed by first class mail, return receipt
requested. Notices, demands and communications to the Guarantor and the Guaranteed Party shall, unless another address is specified in
writing, be sent to the addresses indicated below:
if
to the Guarantor, to :
c/o Welsh, Carson, Anderson & Stowe
599 Lexington Avenue, Suite 1800
New York, New York 10022
Attention: Ting Gu
Email: tgu@wcas.com
with a copy (which shall
not constitute notice) to :
Ropes & Gray LLP
1211 Avenue of the Americas
New York, New York 10036
Attention: Scott Abramowitz; Craig E. Marcus
Email: scott.abramowitz@ropesgray.com;
craig.marcus@ropesgray.com
and if to the Guaranteed Party, as provided in
the Merger Agreement (or, in each case, to such other Persons or addresses as may be designated in writing by the party to receive such
notice as provided above).
7. CONTINUING
GUARANTY . Unless terminated pursuant to this Section 7 , this Limited Guaranty may not be revoked or terminated and shall
remain in full force and effect until the Guaranteed Obligations have been indefeasibly paid in full (subject to the Cap). Notwithstanding
the foregoing, or anything express or implied in this Limited Guaranty or otherwise, this Limited Guaranty shall terminate automatically
and immediately without the giving of notice and the Guarantor shall have no further obligations under or in connection with this Limited
Guaranty and the Guaranteed Obligations hereof as of the earliest to occur of: (a) the Closing, if the Closing occurs; (b) the
date that the Guaranteed Obligations in an amount equal to the Cap have been paid in full; (c) the termination of the Merger Agreement
in accordance with its terms under any circumstance in which Parent would not be obligated to pay the Parent Termination Fee; and (d) the
three (3)-month anniversary of any termination of the Merger Agreement in accordance with its terms under any circumstance in which Parent
would be obligated to pay the Parent Termination Fee (unless, in the case of this clause (d), the Guaranteed Party shall have commenced
litigation against the Guarantor under and pursuant to this Limited Guaranty prior to end of such three (3)-month period, in which case
this Limited Guaranty shall terminate upon the final, non-appealable resolution of such action and satisfaction by the Guarantor of any
obligations finally determined or agreed to be owed by the Guarantor, consistent with the terms hereof).
- 5 -
Notwithstanding the foregoing,
or anything express or implied in this Limited Guaranty or otherwise, in the event that the Guaranteed Party or any of its Affiliates
(other than the Rollover Holders) asserts in any litigation or other proceeding any of the following: (i) that the provisions of
Section 1 hereof limiting the Guarantor’s aggregate liability or the provisions of this Section 7 or Section 8
hereof are illegal, invalid or unenforceable in whole or in part, (ii) that the Guarantor is liable in respect of the Guaranteed
Obligations in excess of or to a greater extent than the Cap, or (iii) any theory of liability (whether at law or in equity whether
sounding in contract, tort, statute or otherwise) against any Non-Recourse Party with respect to this Limited Guaranty, the equity commitment
letter by and between the Guarantor and Parent, dated as of the date hereof (the “ Equity Commitment Letter ”), the
Merger Agreement, any other agreement or instrument delivered in connection with this Limited Guaranty, the Equity Commitment Letter,
the Merger Agreement or any of the transactions contemplated hereby or thereby, in each case, other than Retained Claims (as defined
in Section 8 hereof) asserted by the Guaranteed Party against the Non-Recourse Parties against which such Retained Claims
may be asserted pursuant to Section 8 , then: (x) the obligations of the Guarantor under or in connection with this Limited
Guaranty shall terminate and be null and void ab initio ; (y) if the Guarantor has previously made any payments under or in
connection with this Limited Guaranty, it shall be entitled to recover and retain such payments; and (z) neither the Guarantor nor
any other Non-Recourse Parties shall have any liability whatsoever (whether at law or in equity, whether sounding in contract, tort,
statute or otherwise) to the Guaranteed Party or any other Person in any way under or in connection with this Limited Guaranty, the Equity
Commitment Letter, the Merger Agreement, or any other agreement or instrument delivered in connection with this Limited Guaranty, the
Merger Agreement or the transactions contemplated hereby or thereby.
8. NO
RECOURSE . The Guaranteed Party acknowledges the separate corporate existence of Parent. The Guaranteed Party acknowledges and agrees
that the sole asset of Parent is cash in a de minimis amount and its rights under the Merger Agreement and the Equity Commitment
Letter and that no additional funds are expected to be contributed to Parent unless and until the Closing occurs pursuant to the Merger
Agreement. Notwithstanding anything that may be expressed or implied in this Limited Guaranty, the Merger Agreement, the Equity Commitment
Letter, the Confidentiality Agreement or in any other agreement or instrument delivered under any of the foregoing or contemplated by
any of the foregoing (collectively, the “ Transaction Documents ”) or statement made, information provided or action
taken in connection with, or that otherwise in any manner relates to, the transactions contemplated by any of the Transaction Documents
or the negotiation, execution, performance or breach of any Transaction Document (this Limited Guaranty, the other Transaction Documents
and such statements, information, actions, transactions, negotiations, breaches and other matters collectively, “ Transaction-Related
Matters ”), and notwithstanding any equitable, common law or statutory right or claim that may be available to the Guaranteed
Party or any of its direct or indirect holders of equity interests or Affiliates, and notwithstanding the fact that the Guarantor is
a partnership, by its acceptance of the benefits of this Limited Guaranty, the Guaranteed Party covenants, acknowledges and agrees, on
behalf of itself, its Affiliates, and any Persons claiming by, through or on behalf of any of them, that:
(a) no
Non-Recourse Party has or shall have any obligations (whether of an equitable, contractual, tort, statutory or other nature) under, in
connection with or in any manner related to any Transaction-Related Matter, other than (i) Parent’s obligation to pay the
Parent Termination Fee and the Additional Obligations pursuant to Section 9.5 of the Merger Agreement, and, without duplication,
the Guarantor’s obligation to guarantee such payment pursuant to the terms of this Limited Guaranty (subject to the Cap) and to
otherwise comply with the terms of this Limited Guaranty, (ii) without duplication of the obligations referenced in clause (i) above,
the other obligations of Parent to perform its obligations under the Merger Agreement, on the terms and subject to the conditions thereof
including any limitations of remedies under the Merger Agreement, (iii) the Guarantor’s obligation to Parent to specifically
perform its agreement to make an equity contribution to Parent pursuant to the Equity Commitment Letter on the terms and subject to the
conditions thereof and (iv) the obligations of the Guarantor under, and pursuant to the terms of, the Confidentiality Agreement
(the specific claims described in clauses (i) through (iv) in each case against the Person or Persons specified in such clause
being referred to herein, collectively, as the “ Retained Claims ”);
- 6 -
(b) no
recourse (whether under an equitable, contractual, tort, statutory or other claim or theory) under, in connection with or in any manner
related to any Transaction-Related Matter shall be sought or had against (and, without limiting the generality of the foregoing, no liability
shall attach to) any Non-Recourse Party, whether through Parent or any other Person interested in the transactions contemplated by any
Transaction Document or otherwise, whether by or through theories of equity, agency, control, instrumentality, alter ego, domination,
sham, single business enterprise, piercing the veil, unfairness, undercapitalization, or any other attempt to avoid or disregard the
entity form of any Non-Recourse Party, by or through a claim by or on behalf of the Guaranteed Party, its Affiliates, Parent or any other
Person against any Non-Recourse Party, by the enforcement of any assessment, by any legal or equitable proceeding, by virtue of any applicable
Law, or otherwise, except, in each case, for Retained Claims; and
(c) neither
of the Guaranteed Party nor its Affiliates has relied on any statement, representation or warranty or assurance made by, or any action
taken by, any Person in connection with or in any manner related to a Transaction-Related Matter, other than those made by (i) the
Guarantor in this Limited Guaranty and the Equity Commitment Letter, (ii) the parties to the Rollover Agreements in such agreements
and (iii) Parent in the Transaction Documents.
The Retained Claims shall
be the sole and exclusive remedy (whether at law or in equity, whether sounding in contract, tort, statute or otherwise) of the Guaranteed
Party, its Affiliates, and any Persons claiming by, through or on behalf of any of them, against any or all of the Non-Recourse Parties,
in respect of any claims, liabilities or obligations arising in any way under, in connection with or in any manner related to any Transaction-Related
Matter.
- 7 -
To the fullest extent permitted
by applicable Law, the Guaranteed Party, on behalf of itself, its Affiliates, and any Persons claiming by, through or on behalf of any
of them, hereby releases, remises and forever discharges all claims (other than Retained Claims) that the Guaranteed Party, its direct
and indirect holders of equity interests or any of its Affiliates, or any Persons claiming by, through or on behalf of any of them, has
had, now has or might in the future have against any Non-Recourse Party arising in any way under, in connection with or in any manner
related to any Transaction-Related Matter.
The Guaranteed Party hereby
covenants and agrees that, other than with respect to the Retained Claims, it shall not, and it shall cause Affiliates not to, institute
any litigation, action, suit or other proceeding or bring any claim in any way under, in connection with or in any manner related to
any Transaction-Related Matter (whether at law or in equity, whether sounding in contract, tort, statute or otherwise) against any Non-Recourse
Party. Other than the Non-Recourse Parties, no Person other than the Guarantor and the Guaranteed Party shall have any rights or remedies
under, in connection with or in any manner related to this Limited Guaranty or the transactions contemplated hereby.
As used herein, the term
“ Non-Recourse Parties ” means the Guarantor and any and all former, current or future direct or indirect holders of
any equity, general or limited partnership or limited liability company interests, controlling persons, incorporators, directors, officers,
employees, agents, attorneys, members, managers, management companies, portfolio companies, general or limited partners, stockholders,
representatives, assignees or Affiliates of the Guarantor (including, but not limited to, Parent) and any and all former, current or
future direct or indirect holders of any equity, general or limited partnership or limited liability company interests, controlling persons,
incorporators, directors, officers, employees, agents, attorneys, members, managers, management companies, portfolio companies, general
or limited partners, stockholders, representatives, assignees or Affiliates of any of the foregoing, and any and all former, current
or future direct or indirect heirs, executors, administrators, trustees, representatives, successors, assigns or agents of any of the
foregoing.
9. THIRD
PARTY BENEFICIARIES . This Limited Guaranty shall be binding upon, inure solely to the benefit of and be enforceable by the parties
hereto and their respective successors and permitted assigns, in accordance with and subject to the terms of this Limited Guaranty, and
nothing express or implied in this Limited Guaranty is intended to, or shall, confer upon any other Person any benefits, rights or remedies
under or by reason of, or any rights to enforce or cause the Guaranteed Party to enforce, the obligations set forth herein; except that
as a material aspect of this Limited Guaranty, the parties hereto intend that all Non-Recourse Parties other than the Guarantor shall
be, and such Non-Recourse Parties are, intended third party beneficiaries of this Section 9 , and all interpretative provisions
required to give effect hereto, who may rely on and enforce the provisions of this Limited Guaranty that bar the liability, or otherwise
protect the interests, of such Non-Recourse Parties.
- 8 -
10. CONFIDENTIALITY .
This Limited Guaranty shall be treated as confidential and is being provided to the Guaranteed Party solely in connection with the Transaction.
This Limited Guaranty may not be used, circulated, delivered, quoted or otherwise referred to in any document (other than the Merger
Agreement and the Equity Commitment Letter, and any Debt Financing documentation) by the Guaranteed Party or any of its Affiliates except
with the prior written consent of the Guarantor; provided , that no such written consent is required for any disclosure of this
Limited Guaranty to (a) the extent required by applicable Law (or the rules of any stock exchange or self-regulatory organization)
or in connection with the enforcement of rights under this Limited Guaranty, the Merger Agreement or the transactions contemplated hereby
and thereby or (b) representatives of Guarantor or the Guaranteed Party who need to know of the existence of this Limited Guaranty
in connection with the transactions contemplated hereby so long as such representatives agree to keep such information confidential on
terms substantially identical to the terms contained in this Section 10 .
11. AMENDMENTS
AND WAIVERS . No amendment, modification or waiver of any provision of this Limited Guaranty will be enforceable unless approved in
writing by the Guarantor and the Guaranteed Party.
12. COUNTERPARTS .
This Limited Guaranty may be executed in one or more counterparts, all of which shall constitute one and the same instrument. Any such
counterpart, to the extent delivered by means of electronic transmission (including by pdf, .tif, .gif, .jpeg or similar attachment to
electronic mail (any such delivery, an “ Electronic Delivery ”)) shall be treated in all manner and respects as an original
executed counterpart and shall be considered to have the same binding legal effect as if it were the original signed version thereof
delivered in person. At the request of a party, the other party shall re-execute the original form of this Limited Guaranty and deliver
such form to such requesting party. No party shall raise the use of Electronic Delivery to deliver a signature or the fact that any signature
or agreement or instrument was transmitted or communicated through the use of Electronic Delivery as a defense to the formation of a
contract, and each such party forever waives any such defense. Minor variations in the form of the signature page, including footers
from earlier versions of this Limited Guaranty or any such other document, will be disregarded in determining a party’s intent
or the effectiveness of such signature.
13. ENTIRE
AGREEMENT . This Limited Guaranty, together with the Merger Agreement and the Equity Commitment Letter, and each of the other instruments
and agreements contemplated hereby and thereby, constitute the entire agreement among the parties hereto with respect to the subject
matter hereof and supersede all other prior agreements and understandings, both written and oral, among the parties hereto with respect
to the subject matter hereof. The parties hereto have participated jointly in the negotiation and drafting of this Limited Guaranty.
In the event an ambiguity or question of intent or interpretation arises, this Limited Guaranty shall be construed as if drafted jointly
by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party hereto by virtue of the authorship
of any of the provisions of this Limited Guaranty.
14. MISCELLANEOUS.
(a) The
provisions of Section 10.4 ( Governing Law and Venue; Waiver of Jury Trial ) and 10.12 ( Interpretation and Construction )
of the Merger Agreement are incorporated herein mutatis mutandis as if fully set forth herein and made a part of this Limited
Guaranty.
- 9 -
(b) Any
term or provision of this Limited Guaranty that is invalid or unenforceable in any jurisdiction shall be, as to such jurisdiction, ineffective
solely to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction; provided ,
however , that this Limited Guaranty may not be enforced without giving effect to the limitations of the amount payable by the
Guarantor hereunder to the Cap, as provided in Section 1 hereof, and to the provisions of Sections 7 and 8
hereof. Each party hereto covenants and agrees that it shall not assert, and shall cause their respective Affiliates, not to assert,
that this Limited Guaranty or any part hereof is invalid, illegal or unenforceable in accordance with its terms.
(c) The
descriptive headings herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning
or interpretation of this Limited Guaranty.
15. RELATIONSHIPS
OF THE PARTIES . Each party acknowledges and agrees that (a) this Limited Guaranty is not intended to, and does not, create any
agency, partnership, fiduciary or joint venture relationship between any of the parties hereto and neither this Limited Guaranty nor
any other document or agreement entered into by any party hereto relating to the subject matter hereof shall be construed to suggest
otherwise and (b) the obligations of the Guarantor under this Limited Guaranty are solely contractual in nature.
[Remainder of this page intentionally
left blank – signature page follows]
- 10 -
IN WITNESS WHEREOF, each
of the Guarantor and the Guaranteed Party has caused this Limited Guaranty to be executed and delivered as of the date first written
above by its officer or representative thereunto duly authorized.
| GUARANTOR : |
| |
| WCAS XIV, L.P. |
| |
| By: WCAS XIV Associates LLC |
| Its: General Partner |
| | |
| By: | /s/ Jennifer Martin |
| Name: | Jennifer Martin |
| Title: | Managing Member |
[ Signature
Page to Limited Guaranty ]
|
THE GUARANTEED PARTY : |
|
|
|
SELECT MEDICAL HOLDINGS CORPORATION |
|
|
|
By: |
/s/ John F. Duggan |
|
Name: |
John F. Duggan |
|
Title: |
Executive Vice President, General Counsel and Secretary |
[ Signature
Page to Limited Guaranty ]
### EX-99.(D)(XII) - EXHIBIT 99.(D)(XII)
EX-99.(D)(XII)
17
tm2611660d2_ex99-dxii.htm
EXHIBIT 99.(D)(XII)
Exhibit (d)(xii)
Execution Version
JPMORGAN CHASE BANK, N.A.
270 Park Avenue
New York, NY 10017
|
WELLS FARGO BANK, NATIONAL
ASSOCIATION
WELLS FARGO SECURITIES, LLC
550 South Tryon Street, 7th Floor
Charlotte, NC 28202
|
BANK OF AMERICA, N.A.
BOFA SECURITIES, INC.
One Bryant Park
New York, NY 10036
|
DEUTSCHE BANK AG NEW YORK BRANCH
DEUTSCHE BANK SECURITIES INC.
1 Columbus Circle
New York, NY 10019
|
TRUIST BANK
TRUIST SECURITIES, INC.
740 Battery Ave SE
Atlanta, GA 30339
THE BANK OF NOVA SCOTIA
250 Vesey Street
New York, NY 10281
|
ROYAL BANK OF CANADA
200 Vesey Street
New York, NY 10281
MIZUHO BANK, LTD.
1271 Avenue of the Americas
New York, NY 10020
|
CAPITAL ONE, NATIONAL ASSOCIATION
299 Park Avenue
New York, NY 10171
|
PNC BANK, NATIONAL ASSOCIATION
PNC CAPITAL MARKETS LLC
300 Fifth Ave
Pittsburgh, PA 15222
|
FIFTH THIRD BANK, NATIONAL ASSOCIATION
38 Fountain Square Plaza
Cincinnati, OH 45236
|
|
CONFIDENTIAL
March 14, 2026
Stallion Intermediate Corporation
c/o Welsh, Carson, Anderson & Stowe
599 Lexington Ave, Suite 1800
New York, NY 10022
Attention: Ting Gu
Project Stallion
Amended and Restated Commitment Letter
Ladies and Gentlemen:
You have advised each of
JPMorgan Chase Bank, N.A. (“ JPMCB ”), Wells Fargo Bank, National Association (“ WF Bank ”),
Wells Fargo Securities, LLC (“ WF Securities ” and together with WF Bank, “ Wells Fargo ”),
Bank of America, N.A. (“ BANA ”), BofA Securities, Inc. ( “BAS” ), Deutsche Bank
AG New York Branch (“ DBNY ”), Deutsche Bank Securities Inc. (“ DBSI ”), Truist Bank
(“ Truist ”), Truist Securities, Inc. ( “Truist Securities” ), Royal Bank of Canada
(“ RBC ”), The Bank of Nova Scotia (“ Scotia ”), Mizuho Bank, Ltd. (“ Mizuho ”),
Capital One, National Association (“ Capital One ”), PNC Bank, National Association (“ PNC ”),
PNC Capital Markets LLC ( “PNC Capital Markets” ) and Fifth Third Bank, National Association (“ Fifth
Third ” and together with JPMCB, Wells Fargo, BANA, BAS, DBNY, DBSI, Truist, Truist Securities, RBC, Scotia, Mizuho, Capital
One, PNC and PNC Capital Markets, the “ Commitment Parties ”, “ we ” or “ us ”)
that WCAS XIV, L.P. (the “ Sponsor ”) and certain other investors (collectively with the Sponsor, the “ Investors ”)
including certain officers of Select Medical Holdings Corporation (the “ Company ”) intend to (i) cause
Stallion Intermediate Corporation, a Delaware corporation (“ Newco ” or “ you ”), an
entity formed and controlled by the Investors, to acquire (the “ Acquisition ”), directly or indirectly, the
Company pursuant to an agreement and plan of merger (including the exhibits, schedules, annexes and other attachments thereto, in each
case as amended and in effect from time to time, the “ Acquisition Agreement ”) entered into in connection therewith
and (ii) consummate the other transactions described in Exhibit A hereto. Capitalized terms used but not defined herein
have the meanings assigned to them in the Exhibits attached hereto and, if not defined in the Exhibits attached hereto, have the meanings
assigned to them in the Existing Credit Agreement (as defined below).
This Commitment Letter hereby
amends, restates and supersedes in its entirety, as of the date hereof, that certain Commitment Letter (the “ Original Commitment
Letter ”), dated as of March 2, 2026 (the “ Original Signing Date ”), by and among JPMCB, Wells Fargo
and you, and such Original Commitment Letter shall be of no further force or effect.
| 1. | Commitments . |
In connection with the Transactions
(as defined in Exhibit A hereto), each of JPMCB, WF Bank, BANA, DBNY, Truist, RBC, Scotia, Mizuho, Capital One, PNC and Fifth
Third (collectively, the “ Initial Lenders ”) is pleased to advise you of its commitment to provide on a several,
but not joint, basis the percentage of the entire principal amount of the Revolving Facility (as defined in Exhibit A ) as
set forth opposite such Initial Lender’s name on Schedule 1 hereto (as such schedule may be amended or supplemented in accordance
with this Commitment Letter (as defined below)) upon the terms and subject to the conditions set forth or referred to in this amended
and restated commitment letter (together with the Term Sheet (as defined in Exhibit A hereto), this “ Commitment
Letter ”) and the Amended and Restated Fee Letter dated as of the date hereof by and among us and you (the “ Fee
Letter ”). Nothing in this Commitment Letter shall constitute a commitment by any Commitment Party or any of their respective
Commitments to provide any Other Facility (as defined below) and any such commitment, if provided, would be pursuant to a separate written
agreement between such Commitment Party (or its applicable affiliate) and you.
| 2. | Titles and Roles . |
It is agreed that:
| (a) | JPMCB,WF Securities, BAS, DBSI, Truist
Securities, RBC, Scotia, Mizuho, Capital One, PNC Capital Markets and Fifth Third will act
as joint lead arrangers (in such capacities, the “ Lead Arrangers ”)
and as joint lead bookrunners for the Revolving Facility and any bank loan or other credit
facility incurred in lieu of all or a portion of the Revolving Facility (an “ Other
Facility ” and, together with the Revolving Facility, the “ Facilities ”
and each a “ Facility ”). |
| (b) | JPMCB will act as sole administrative
agent (in such capacity, the “ Administrative Agent ”) for the Revolving
Facility and any Other Facility. |
2
It is further agreed that
(A) JPMCB will have “top left” placement in any marketing materials or other documentation for the Revolving Facility
and any Other Facility, and will hold the roles and responsibilities conventionally understood to be associated with such name placement
and WF Securities shall receive “second” placement in any such marketing materials or other documentation and (B) the
other Lead Arrangers for the Revolving Facility or Other Facility will be listed in customary fashion (as reasonably determined by you).
You agree that no other agents,
co-agents, arrangers, bookrunners or managers will be appointed, no other titles will be awarded and no compensation (other than as expressly
contemplated by this Commitment Letter and the Fee Letter) will be paid by you to any Lender in order to obtain its commitment in respect
of the Revolving Facility unless you and the Commitment Parties as of the date hereof shall so agree.
| 3. | Syndication . |
The Lead Arrangers reserve
the right, prior to or after the execution of the Revolving Facility Documentation (as defined in Exhibit A hereto), to syndicate
all or a portion of the Initial Lenders’ commitments hereunder and, if applicable, the commitments in respect of any Other Facility
to a group of banks, financial institutions and other institutional lenders identified by the Commitment Parties in consultation with
you and subject to your consent, such consent not to be unreasonably withheld or delayed, including any relationship lenders designated
by you in consultation with the Commitment Parties (together with the Initial Lenders, the “ Lenders ”); provided
that, notwithstanding the Lead Arrangers’ right to syndicate the Revolving Facility and receive commitments with respect thereto,
(x) the Initial Lenders shall not assign all or any portion of their commitments hereunder until after the initial funding of the
Revolving Facility on the Closing Date (as defined in Exhibit A hereto), (y) such syndication shall not relieve the
Initial Lenders of their obligations set forth herein (including their obligations to fund the Revolving Facility on the Closing Date
on the terms and conditions set forth in this Commitment Letter) and, (z) unless you agree in writing, each Initial Lender shall
retain exclusive control over all rights and obligations with respect to its commitments, including all rights with respect to consents,
modifications, waivers and amendments, until after the initial funding of the Revolving Facility on the Closing Date has occurred. Notwithstanding
the foregoing, the Commitment Parties will not syndicate, participate to or otherwise assign any portion of a commitment under the Revolving
Facility to (i) those persons identified in writing on or prior to the Original Signing Date by you to us or (ii) Disqualified
Institutions (as defined in that certain Credit Agreement (as amended, supplemented or otherwise modified prior to the date hereof, the
“ Existing Credit Agreement ”), dated as of March 6, 2017, by and among the Company, Select Medical Corporation
(the “ Borrower ”), JPMCB, as administrative agent and collateral agent, the lenders party thereto and the other
parties thereto.
3
The Lead Arrangers may elect
to commence syndication efforts promptly upon the execution of this Commitment Letter and as part of their syndication efforts, it is
the Lead Arrangers’ intent to have Lenders commit to the Revolving Facility prior to the Closing Date (subject to the limitations
set forth in the proviso to the first sentence of this Section 3). Until the date that is the earlier of (a) 60 days after
the Closing Date and (b) the date on which the Commitments of the Commitment Parties have been reduced to zero (such earlier date,
the “ Syndication Date ”), you agree to assist (and to use your commercially reasonable efforts to cause the
Company to assist (subject to the terms of the Acquisition Agreement)), the Lead Arrangers in completing a syndication that is reasonably
satisfactory to them and you. Such assistance shall include (a) using your commercially reasonable efforts to ensure that any syndication
efforts benefit from your existing lending and investment banking relationships, (b) facilitating direct contact between appropriate
members of your senior management (and using your commercially reasonable efforts to arrange for direct contact between your representatives
and non-legal advisors and appropriate members of senior management, representatives and non-legal advisors of the Company, subject to
the limitations on your rights set forth in the Acquisition Agreement) and the proposed Lenders at times and locations mutually agreed
upon, (c) your assistance (and your using commercially reasonable efforts to cause the Company to assist) in the preparation of
a customary confidential information memorandum (a “ Confidential Information Memorandum ”) for the Revolving
Facility and other customary marketing materials to be used in connection with the syndications (such materials, together with the Confidential
Information Memorandum and the Term Sheet, collectively, the “ Information Materials ”), by providing information
and other customary materials reasonably requested in connection with such Information Materials, all subject to the limitation on your
rights to request information concerning the Company as set forth in the Acquisition Agreement, (d) using your commercially reasonable
efforts to procure updated public corporate and public corporate family ratings (but no specific rating in either case) for the Borrower
and public ratings (but no specific rating) for the Revolving Facility or Other Facility, as applicable, from each of S&P Global
Ratings and Moody’s Investors Service, Inc. prior to or concurrently with the launch of general syndication of the Revolving
Facility and (e) the hosting, with the Lead Arrangers, of one or more telephonic meetings of prospective Lenders (limited to one
“bank meeting”, unless otherwise deemed necessary in the reasonable judgment of the Lead Arrangers) at times mutually agreed
upon (and your using your commercially reasonable efforts to cause the senior management of the Company, as appropriate, to be available
for such meetings, subject to the limitations on your rights as set forth in the Acquisition Agreement). On or prior to the Syndication
Date, you will ensure that there will not be any competing issues of debt securities or credit facilities of you, and, with respect to
the Company and its subsidiaries, you will use commercially reasonable efforts to ensure that there will be no competing issues of credit
facilities or debt securities of the Company or any of its subsidiaries (other than the Senior Notes (as defined in Exhibit A
hereto)), in each case being offered, placed or arranged, that would materially impair the primary syndication of the Revolving Facility
(it being understood that any Other Facility that would replace in full the Revolving Facility and any short-term working capital facilities,
letters of credit, capital leases, purchase money indebtedness and equipment financings, in each case in the ordinary course of business,
and any indebtedness permitted to be incurred or outstanding under the Acquisition Agreement, shall not be limited pursuant to this sentence),
without the written consent of the Lead Arrangers as of the date hereof (such consent not to be unreasonably withheld or delayed). For
the avoidance of doubt, in connection with the foregoing requirements to provide assistance, you will not be required to provide any
information to the extent that the provision thereof would violate any law, rule or regulation, or any obligation of confidentiality
owing to a third party and binding you, the Company or your or its respective affiliates; provided that , no such obligation of
confidentiality shall be entered into in contemplation of this sentence and in the event you do not provide information in reliance on
this sentence, you shall provide notice to us that such information is being withheld and you shall use your commercially reasonable
efforts to obtain the relevant consents and to communicate, to the extent both feasible and permitted under applicable law, rule, regulation
or confidentiality obligation, the applicable information. Notwithstanding anything to the contrary contained in this Commitment Letter
or the Fee Letter, (i) none of the foregoing (including the obtaining of the updated ratings referenced above) shall constitute
a condition to the commitments hereunder or the funding of the Revolving Facility on the Closing Date and (ii) neither the commencement
nor the completion of the syndication of the Revolving Facility shall constitute a condition precedent to the funding of the Revolving
Facility on the Closing Date.
The Lead Arrangers will,
in consultation with you, manage all aspects of any syndication, including decisions as to the selection of institutions to be approached,
subject, in each case, to your consent (not to be unreasonably withheld or delayed) and excluding Disqualified Institutions, and when
they will be approached, when their commitments will be accepted, which institutions will participate (with your consent not to be unreasonably
withheld or delayed and excluding Disqualified Institutions), the allocation of the commitments among the Lenders and the amount and
distribution of fees among the Lenders.
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| 4. | Information . |
You hereby represent and warrant (with respect
to such information relating to the Company and its subsidiaries prior to the Closing Date, to your knowledge) that (but the accuracy
of which shall not be a condition to the commitments hereunder or the funding of the Revolving Facility on the Closing Date) (a) all
written information other than financial estimates, forecasts and other forward-looking information (collectively, the “ Projections ”)
and other than information of a general economic or general industry nature, that has been or will be made available to any of the Commitment
Parties by or on behalf of you or any of your respective representatives in connection with the transactions contemplated hereby (the
“ Information ”), taken as a whole, does not or will not, when furnished, contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light
of the circumstances under which such statements are made (after giving effect to all supplements and updates thereto) and (b) the
Projections that have been or will be made available to the Lead Arrangers by or on behalf of you or any of your respective representatives
on your behalf in connection with the transactions contemplated hereby have been or will be prepared in good faith based upon assumptions
that are believed by you to be reasonable at the time furnished; it being understood that any such Projections are not to be viewed as
facts, are subject to significant uncertainties and contingencies, many of which are beyond your control, that no assurance can be given
that any particular Projections will be realized, that actual results may differ and that such differences may be material. You agree
that, if at any time prior to the later of the Closing Date and the Syndication Date, you become aware that any of the representations
and warranties in the preceding sentence would be incorrect in any material respect if the Information and Projections were being furnished,
and such representations and warranties were being made, at such time, then you will (or prior to the Closing Date with respect to Information
and Projections relating to the Company and its subsidiaries, you will use commercially reasonable efforts to), subject to any applicable
limitations on your rights as set forth in the Acquisition Agreement promptly supplement the Information and the Projections from time
to time until the later of the Closing Date and the Syndication Date so that (with respect to Information and Projections relating to
the Company and its subsidiaries prior to the Closing Date, to your knowledge) such representations and warranties will be correct in
all material respects under those circumstances. In arranging and syndicating the Revolving Facility and any Other Facility, the Commitment
Parties will be entitled to use and rely on the Information and the Projections without responsibility for independent verification thereof
and do not assume responsibility for the accuracy or completeness of the Information or the Projections.
You hereby acknowledge that
(a) we will make available the Information and the Projections to the proposed syndicate of Lenders by posting on IntraLinks, Debt
X, SyndTrak Online or another similar electronic system and (b) certain of the Lenders are or may be “public side” Lenders
(i.e., Lenders that do not wish to receive material non-public information with respect to the Company, its subsidiaries or their respective
securities) (each, a “ Public Lender ”). At the request of the Lead Arrangers, you agree to assist us in preparing
an additional version of the Information Materials to be used by Public Lenders that consists exclusively of information and documentation
that is either publicly available or not material with respect to the Company, its subsidiaries or their respective securities for purposes
of United States federal and state securities laws (such information and documents, “ Public Lender Information ”).
Any information and documentation that is not Public Lender Information is referred to herein as “ Private Lender Information ”.
It is understood that in connection with your assistance described above, a customary authorization letter will be included in the Confidential
Information Memorandum that authorizes the distribution of the Information Materials to prospective Lenders and, if applicable, confirms
that the public-side version of the Information Materials only contains Public Lender Information, and the Confidential Information Memorandum
shall exculpate you, the Company, your and its respective affiliates and us and our affiliates with respect to any liability related
to the use or misuse of, the contents of such Information Materials or any related marketing material by the recipients thereof. You
acknowledge that the following documents contain solely Public Lender Information, unless, after having been given a reasonable opportunity
to review such documents, you notify us promptly that any such document contains Private Lender Information: (i) term sheets and
drafts and final definitive documentation with respect to the Revolving Facility and any Other Facility, (ii) administrative materials
prepared by the Commitment Parties for prospective Lenders (such as a lender meeting invitation, allocations and funding and closing
memoranda) and (iii) notification of changes in the terms of the Revolving Facility or any Other Facility. At our request, you shall
identify that portion of the Information Materials to be distributed to Public Lenders by clearly and conspicuously marking the same
as “PUBLIC” (it being understood that you shall not otherwise be under any obligation to mark Information Materials as “PUBLIC”).
5
| 5. | Fees . |
As consideration for the
commitments of the Initial Lenders hereunder and the Lead Arrangers’ agreement to perform the services described herein, you agree
to pay (or cause to be paid) the fees set forth in the Fee Letter on the terms and subject to the conditions (including as to timing
and amount) set forth therein. Once paid, such fees shall not be refundable under any circumstances, except as otherwise contemplated
herein or by the Fee Letter or as otherwise separately agreed to in writing by you and us.
| 6. | Conditions Precedent . |
The commitments of the Initial
Lenders hereunder to fund the Revolving Facility on the Closing Date and the Lead Arrangers’ agreement to perform the services
described herein are subject only to the express conditions set forth in Exhibit C hereto (the “ Funding Conditions ”),
and upon satisfaction (or waiver by the Commitment Parties) of the Funding Conditions, the initial funding of the Revolving Facility
shall occur; it being understood and agreed that there are no other conditions (implied or otherwise) to the commitments hereunder, including
compliance with the terms of the Commitment Letter, the Fee Letter and the Revolving Facility Documentation.
Notwithstanding anything
in this Commitment Letter, the Fee Letter, the Revolving Facility Documentation or any other letter agreement or other undertaking concerning
the financing of the Transactions to the contrary, (i) the only representations and warranties the making or accuracy of which shall
be a condition precedent to the initial funding under the Revolving Facility on the Closing Date shall be (A) such of the representations
and warranties made by or with respect to the Company and its subsidiaries in the Acquisition Agreement as are material to the interests
of the Lenders, but only to the extent that you have (or your applicable affiliate has) the right (taking into account any applicable
cure provisions), pursuant to the Acquisition Agreement, to terminate your (or its) obligations under the Acquisition Agreement to consummate
the Acquisition (or the right not to consummate the Acquisition pursuant to the Acquisition Agreement) as a result of a breach of such
representations and warranties (the “ Specified Acquisition Agreement Representations ”) and (B) the Specified
Representations (as defined below) and (ii) the terms of the Revolving Facility Documentation and the Closing Deliverables (as defined
in Exhibit C hereto) shall be in a form such that they do not impair the initial funding under the Revolving Facility on
the Closing Date if the conditions expressly set forth in Exhibit C hereto are satisfied (or waived by the Lead Arrangers)
(it being understood that, to the extent any security interest in any Collateral is not or cannot be provided (other than a security
interest that can be created by the execution and delivery of a security agreement) and/or perfected (other than (A) a lien on Collateral
that may be perfected by the filing of a financing statement under the Uniform Commercial Code (“ UCC ”) or (B) a
pledge of the equity interests of the Borrower and its material wholly owned U.S. restricted subsidiaries (solely to the extent required
in the Existing Credit Agreement) with respect to which a lien may be perfected upon closing by the delivery of a stock or equivalent
certificate, along with undated transfer powers executed in blank) to the extent required under the Existing Credit Agreement on the
Closing Date after your use of commercially reasonable efforts to do so without undue burden or expense, then the provision and/or perfection
of security interests in such Collateral shall not constitute a condition precedent to the initial funding of the Revolving Facility
on the Closing Date, but shall be required to be provided and/or perfected after the Closing Date in accordance with the requirements
of the Existing Credit Agreement). For purposes hereof, “ Specified Representations ” means the representations
and warranties of the Borrower and the Guarantors set forth in the Revolving Facility Documentation relating to corporate or other organizational
existence of the Borrower and the Guarantors, organizational power and authority (as to execution, delivery and performance of the Revolving
Facility Documentation) of the Borrower and the Guarantors, the due authorization, execution, delivery and enforceability of the applicable
Facility Documentation, solvency as of the Closing Date (after giving effect to the Transactions) of the Borrower and its subsidiaries
on a consolidated basis (such representation and warranty to be consistent with the solvency certificate in the form set forth in Annex
I attached to Exhibit C hereto), no conflicts of Revolving Facility Documentation (limited to the execution, delivery, and
performance of the Revolving Facility Documentation, incurrence of the indebtedness thereunder and the granting of the guarantees and
the security interests in respect thereof) with charter documents, Federal Reserve margin regulations, the Investment Company Act, PATRIOT
Act, Sanctioned Persons and use of proceeds not violating OFAC, FCPA, PATRIOT Act and the creation, validity and perfection of security
interests in the Collateral (subject to permitted liens as set forth in the Revolving Facility Documentation and the limitations set
forth in the preceding sentence and the Term Sheet). This paragraph and the provisions contained herein shall be referred to as the “ Certain
Funds Provision ”.
6
| 7. | Indemnification; Expenses . |
You agree (a) to indemnify
and hold harmless each of the Commitment Parties, their respective affiliates and controlling persons and the respective officers, directors,
members, partners, employees, advisors, agents and representatives of each of the foregoing and their successors and permitted assigns
(each, an “ Indemnified Person ” or a “ Commitment Party Related Person ”) from and against
any and all losses, claims, damages, liabilities and out-of-pocket expenses, joint or several, to which any such Indemnified Person may
become subject arising out of, resulting from or in connection with any actual or threatened claim, dispute, litigation, investigation
or proceeding relating to this Commitment Letter, the Fee Letter, the Original Commitment Letter, the Original Fee Letter (as defined
in the Fee Letter), the Transactions or the Revolving Facility or any Other Facility or the use of proceeds thereof (any of the foregoing,
an “ Action ”), regardless of whether any such Indemnified Person is a party thereto, whether or not such Action
is brought by you, the Company, your equity holders, affiliates, creditors or any other person, and to reimburse each such Indemnified
Person within 30 days after receipt of a written request together with reasonably detailed backup documentation for any reasonable out-of-pocket
legal (limited to one counsel for all Indemnified Persons taken as a whole and, if reasonably necessary, a single local counsel for all
Indemnified Persons taken as a whole in each relevant jurisdiction and, solely in the case of a conflict of interest, one additional
counsel in each relevant jurisdiction to the affected Indemnified Persons similarly situated taken as a whole) or other reasonable out-of-pocket
expenses incurred in connection with investigating, preparing to defend or defending, or providing evidence in or preparing to serve
or serving as a witness with respect to, any of the foregoing; provided , that the foregoing indemnity will not, as to any Indemnified
Person, apply to losses, claims, damages, liabilities or expenses (i) to the extent resulting from the willful misconduct, bad faith
or gross negligence of such Indemnified Person or any of its Related Indemnified Persons (as defined below), (ii) to the extent
arising from a material breach of the obligations of such Indemnified Person or any of its Related Indemnified Persons under this Commitment
Letter, the Fee Letter, the Original Commitment Letter, the Original Fee Letter or the Revolving Facility Documentation or (iii) to
the extent arising from any dispute solely among Indemnified Persons other than any claims against any Commitment Party in its capacity
or in fulfilling its role as an Administrative Agent or arranger or any similar role under any Facility and other than any claims arising
out of any act or omission on the part of you or your affiliates (in the case of each of preceding clauses (i), (ii) and (iii) as
determined by a court of competent jurisdiction in a final non-appealable judgment) and (b) to reimburse the Commitment Parties
and each of their respective affiliates from time to time, upon presentation of a summary statement, together with any supporting documentation
reasonably requested by you, for all reasonable and documented out-of-pocket expenses (including but not limited to out-of-pocket expenses
of the Commitment Parties’ due diligence investigation, syndication expenses and travel expenses but limited, in the case of legal
expenses, to the reasonable fees, disbursements and other charges of counsel to the Lead Arrangers identified in this Commitment Letter
and, if necessary, of a single local counsel to the Lead Arrangers identified in this Commitment Letter in each relevant jurisdiction),
in each case incurred in connection with the Revolving Facility and any Other Facility and the preparation of this Commitment Letter,
the Fee Letter, the Original Commitment Letter, the Original Fee Letter, the Revolving Facility Documentation and the definitive documentation
for any Other Facility and any security arrangements in connection therewith (such expenses in this clause (b), collectively, the “ Expenses ”);
provided that you shall not be required to reimburse any of the Expenses in the event the Closing Date does not occur. Notwithstanding
any other provision of this Commitment Letter, (i) none of the Commitment Party Related Persons nor any other party hereto shall
be liable for any damages arising from the use by others of information or other materials obtained through electronic, telecommunications
or other information transmission systems, except to the extent such damages are found in a final non-appealable judgment of a court
of competent jurisdiction to have resulted from the willful misconduct, bad faith or gross negligence of such Indemnified Persons, or
any of its Related Indemnified Persons, as applicable, and (ii) neither (x) any Commitment Party Related Person nor (y) you
(or any of your subsidiaries or affiliates) shall be liable for any indirect, special, punitive or consequential damages (with respect
to you in the case of this clause (y), other than pursuant to the indemnification provisions of this Commitment Letter in respect of
any such damages incurred or paid by an Indemnified Person to a third party) in connection with this Commitment Letter, the Fee Letter,
the Original Commitment Letter, the Original Fee Letter, the Revolving Facility, any Other Facility, the Transactions (including the
Revolving Facility and any Other Facility and the use of proceeds thereunder), or with respect to any activities related to the Revolving
Facility and any Other Facility. You shall not be liable for any settlement of any Action effected without your prior written consent
(which consent shall not be unreasonably withheld, conditioned or delayed), but if settled with your written consent, you agree to indemnify
and hold harmless each Indemnified Person in the manner set forth above. You shall not, without the prior written consent of the affected
Indemnified Person (which consent shall not be unreasonably withheld, conditioned or delayed), effect any settlement of any pending or
threatened Action in respect of which indemnity could be sought hereunder by such Indemnified Person unless such settlement (i) includes
an unconditional release of such Indemnified Person in form and substance reasonably satisfactory to such Indemnified Person from all
liability or claims that are the subject matter of such Action and (ii) does not include any statement as to any admission of fault
or culpability of such Indemnified Person. Notwithstanding the foregoing, each Indemnified Person (and its Related Indemnified Persons)
shall be obligated to refund and/or return promptly any and all amounts paid by you or on your behalf under this paragraph to such Indemnified
Person (or its Related Indemnified Persons) for any such losses, claims, damages, liabilities and expenses to the extent such Indemnified
Person (or its Related Indemnified Persons) is not entitled to payment of such amounts in accordance with the terms hereof as determined
by a court of competent jurisdiction in a final non-appealable judgment.
7
For purposes hereof, a “ Related
Indemnified Person ” of an Indemnified Person means (1) any controlling person or controlled affiliate of such Indemnified
Person, (2) the respective directors, officers, or employees of such Indemnified Person or any of its controlling persons or controlled
affiliates and (3) the respective agents or representatives of such Indemnified Person or any of its controlling persons or controlled
affiliates, in the case of this clause (3), acting on behalf of or at the instructions of such Indemnified Person, controlling person
or such controlled affiliate; provided that each reference to a controlled affiliate, director, officer or employee in this sentence
pertains to a controlled affiliate, director, officer or employee involved in the negotiation or syndication of this Commitment Letter
and the Revolving Facility and any Other Facility.
8
| 8. | Sharing Information; Absence of Fiduciary Relationship; Affiliate Activities . |
You acknowledge that the
Commitment Parties and their affiliates may be providing debt financing, equity capital or other services (including without limitation
investment banking, commercial banking and financial advisory services, securities trading, hedging, financing and brokerage activities
and financial planning and benefits counseling) to other companies in respect of which you or the Company may have conflicting interests.
We will not furnish confidential information obtained from or on behalf of you or the Company by virtue of the transactions contemplated
by this Commitment Letter or our other relationships with you or the Company to other companies (except as contemplated below in Section 12).
You also acknowledge that we do not have any obligation to use in connection with the transactions contemplated by this Commitment Letter,
or to furnish to you or the Company, confidential information obtained by us or any of our respective affiliates from other companies.
You further acknowledge and
agree that (a) no fiduciary, advisory or agency relationship between you and your affiliates and the Commitment Parties and/or their
affiliates is intended to be or has been created in respect of any of the transactions contemplated by this Commitment Letter, irrespective
of whether the Commitment Parties have advised or are advising you on other matters, (b) the Commitment Parties, on the one hand,
and you, on the other hand, have an arm’s-length business relationship that does not directly or indirectly give rise to, nor do
you rely on, any fiduciary duty on the part of the Commitment Parties and you waive, to the fullest extent permitted by law, any claims
you may have against us for breach of fiduciary duty or alleged breach of fiduciary duty in connection with the Transactions and agree
that we will have no liability (whether direct or indirect) to you in respect of such a fiduciary duty claim or to any person asserting
a fiduciary duty claim on your behalf, including equity holders, employees or creditors, (c) you are capable of evaluating and understanding,
and you understand and accept, the terms, risks and conditions of the transactions contemplated by this Commitment Letter, (d) you
have been advised that the Commitment Parties and their affiliates are engaged in a broad range of transactions that may involve interests
that differ from your and your affiliates’ interests and that the Commitment Parties have no obligation to disclose such interests
and transactions to you or your affiliates, (e) you have consulted your own legal, accounting, regulatory and tax advisors to the
extent you have deemed appropriate and (f) each Commitment Party has been, is and will be acting solely as a principal and, except
as otherwise expressly agreed in writing by the relevant parties, has not been, is not and will not be acting as an advisor, agent or
fiduciary for you, any of your affiliates or any other person or entity. In addition, the Commitment Parties may employ the services
of their respective affiliates in providing certain services hereunder and may exchange with such affiliates in connection therewith
information concerning you and the Company, and such affiliates shall be entitled to the benefits afforded to, and subject to the obligations
of, the Commitment Parties under this Commitment Letter. You acknowledge and agree that we have not provided you with legal, tax or accounting
advice and that you have obtained such independent advice from your own advisors, representatives and agents.
You further acknowledge that
each Commitment Party and/or its affiliates is a full service securities firm engaged in securities trading and brokerage activities
as well as providing investment banking, commercial banking and other financial services. In the ordinary course of business, each Commitment
Party may provide investment banking, commercial banking and other financial services to, and/or acquire, hold or sell, for its own accounts
and the accounts of customers, equity, debt and other securities and financial instruments (including bank loans and other obligations)
of, you, the Company and its subsidiaries and other companies with which you, the Company or its subsidiaries may have commercial or
other relationships. With respect to any securities and/or financial instruments so held by the Commitment Parties, their affiliates
or any of their respective customers, all rights in respect of such securities and financial instruments, including any voting rights,
will be exercised by the holder of the rights, in its sole discretion.
9
| 9. | Assignments; Amendments; Governing Law, Etc . |
This Commitment Letter and
the commitments hereunder shall not be assignable by any party hereto (except (x) by you to one or more affiliates that are a “shell”
company organized and existing under the laws of a State of the United States that consummates or intends to consummate the Acquisition
or (y) in connection with any other assignment that occurs as a matter of law pursuant to, or otherwise substantially simultaneously
with the closing of the Acquisition in accordance with the Acquisition Agreement without the prior written consent of each other party
hereto (and any attempted assignment without such consent shall be null and void), is intended to be solely for the benefit of the parties
hereto (and Indemnified Persons), is not intended to confer any benefits upon, or create any rights in favor of, any person other than
the parties hereto (and Commitment Party Related Persons) and is not intended to create a fiduciary relationship among the parties hereto.
Subject to the limitations set forth in Section 3, any and all services to be provided by the Commitment Parties hereunder may be
performed by or through any of their respective affiliates or branches. This Commitment Letter may not be amended or any provision hereof
waived or modified except by an instrument in writing signed by the Commitment Parties and you. This Commitment Letter may be executed
in any number of counterparts, each of which shall be an original and all of which, when taken together, shall constitute one agreement.
Delivery of an executed counterpart of a signature page of this Commitment Letter by facsimile transmission or by “.pdf”
or any electronic signature complying with the U.S. federal ESIGN Act of 2000 or the New York Electronic Signature and Records Act or
other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective
for all purposes to the fullest extent permitted by applicable law. For the avoidance of doubt, the foregoing applies to any amendment,
extension or renewal of this Commitment Letter. Section headings used herein are for convenience of reference only, are not part
of this Commitment Letter and are not to affect the construction of, or to be taken into consideration in interpreting, this Commitment
Letter. This Commitment Letter, together with the Fee Letter, supersedes all prior understandings, whether written or oral, among us
with respect to the Revolving Facility and sets forth the entire understanding of the parties hereto with respect thereto. THIS COMMITMENT
LETTER, AND ANY CLAIM, CONTROVERSY OR DISPUTE (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING UNDER OR RELATED TO THIS
COMMITMENT LETTER, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK; PROVIDED THAT, NOTWITHSTANDING
ANYTHING IN THE FOREGOING TO THE CONTRARY, IT IS UNDERSTOOD AND AGREED THAT ANY DETERMINATIONS AS TO ( A ) WHETHER ANY
REPRESENTATIONS AND WARRANTIES MADE BY OR ON BEHALF OF, OR WITH RESPECT TO, THE COMPANY OR ANY OF ITS SUBSIDIARIES IN THE ACQUISITION
AGREEMENT HAVE BEEN BREACHED, ( B ) WHETHER YOU (AND ANY OF YOUR AFFILIATES THAT IS A PARTY TO THE ACQUISITION AGREEMENT) CAN
TERMINATE YOUR (AND THEIR) OBLIGATIONS UNDER THE ACQUISITION AGREEMENT (OR OTHERWISE DECLINE TO CONSUMMATE THE ACQUISITION), IN
EACH CASE, WITHOUT LIABILITY TO ANY OF YOU OR ANY OF YOUR AFFILIATES, ( C ) WHETHER A COMPANY MATERIAL ADVERSE EFFECT (AS DEFINED
IN THE ACQUISITION AGREEMENT) HAS OCCURRED, AND ( D ) WHETHER THE ACQUISITION HAS BEEN CONSUMMATED IN ACCORDANCE WITH THE TERMS
OF THE ACQUISITION AGREEMENT, SHALL, IN EACH CASE, BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAW OF THE
STATE OF DELAWARE WITHOUT REGARD TO THE CONFLICT OR CHOICE OF LAW PRINCIPLES THEREOF.
| 10. | WAIVER OF JURY TRIAL . |
EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR
OTHERWISE) BROUGHT BY OR ON BEHALF OF ANY PARTY RELATED TO OR ARISING OUT OF THE ACQUISITION OR THIS COMMITMENT LETTER, THE FEE LETTER
OR THE PERFORMANCE OF SERVICES HEREUNDER OR THEREUNDER.
10
| 11. | Jurisdiction . |
Each of the parties hereto
hereby irrevocably and unconditionally (a) submits, for itself and its property, to the exclusive jurisdiction of any New York State
court or Federal court of the United States of America, in each case, sitting in the Borough of Manhattan in the City of New York, and
any appellate court from any thereof, as to any action or proceeding (whether based upon contract, tort or otherwise) arising out of
or relating to this Commitment Letter, the Fee Letter or the transactions contemplated hereby or thereby, or for recognition or enforcement
of any judgment, and agrees that all claims in respect of any such action or proceeding shall be heard and determined in such New York
State or, to the extent permitted by law, in such Federal court, (b) waives, to the fullest extent it may legally and effectively
do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating
to this Commitment Letter, the Fee Letter or the transactions contemplated hereby or thereby in any court in which such venue may be
laid in accordance with clause (a) of this sentence, (c) waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such court and (d) agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Service of any process, summons, notice or document by registered mail or overnight courier addressed to any of the
parties hereto at the addresses set forth above shall be effective service of process against such party for any suit, action or proceeding
brought in any such court.
| 12. | Confidentiality . |
This Commitment Letter is
delivered to you on the understanding that none of this Commitment Letter, the Fee Letter, the Original Commitment Letter or the Original
Fee Letter or their terms or substance shall be disclosed, directly or indirectly, to any other person or entity (including other lenders,
underwriters, placement agents, advisors or any similar persons) except (a) to the Investors and to your and their respective officers,
directors, employees, affiliates, members, partners, stockholders, attorneys, accountants, agents and advisors who are directly involved
in the consideration of the Transactions (and then only on a confidential and need to know basis), (b) if the Commitment Parties
consent to such proposed disclosure, (c) this Commitment Letter and the Original Commitment Letter may be disclosed as may be required
by the rules, regulations, schedules and forms of the Securities and Exchange Commission (the “ SEC ”) in connection
with any filings with the SEC in connection with the Transactions or (d) pursuant to the order of any court or administrative agency
in any pending legal or administrative proceeding, or otherwise as required by applicable law, regulation, compulsory legal process or
as requested by a governmental authority (in which case you agree to inform us promptly thereof to the extent practicable and so long
as you are lawfully permitted to do so); provided that (i) in connection with the Transactions, you may disclose this Commitment
Letter and the Original Commitment Letter and the contents thereof and, on a redacted basis in a manner reasonably acceptable to the
Commitment Parties, the Fee Letter and the Original Fee Letter and the contents thereof to (x) the Company and its officers, directors,
employees, attorneys, accountants, agents and advisors, on a confidential basis and (y) the direct or indirect equity holders of
the Company and their respective officers, directors, employees, affiliates, members, partners, stockholders, attorneys, accountants,
agents and advisors, on a confidential basis, (ii) you may disclose the aggregate fee amounts (including upfront fees and original
issue discount) payable under the Fee Letter as part of generic disclosure regarding sources and uses (but without disclosing any specific
fees, flex or other economic terms set forth therein) in connection with any syndication of the Revolving Facility and any Other Facility
or any prospectus or offering memorandum related to the Senior Notes as part of a disclosure of overall transaction fees and expenses
(not limited to fees associated with the Revolving Facility or any Other Facility) to the Company and its subsidiaries and their respective
equity holders, officers, directors, employees, attorneys, accountants, agents and advisors, (iii) you may disclose to the Company’s
auditors the Fee Letter and the contents thereof after the Closing Date for customary accounting purposes, including accounting for deferred
financing costs, (iv) you may disclose the Term Sheet and the existence of this Commitment Letter and the Original Commitment Letter
to any rating agency in connection with the Transactions and (v) you may disclose the Term Sheet and the existence of this Commitment
Letter and the Original Commitment Letter and the contents hereof and thereof (but, for the avoidance of doubt, not the Fee Letter nor
the Original Fee Letter nor the contents thereof) in any syndication of the Revolving Facility or Other Facility or in any proxy statement
or other public filing in connection with the Acquisition; provided , further , that the foregoing restrictions shall cease
to apply in respect of the existence and contents of this Commitment Letter and the Original Commitment Letter (but not in respect of
the Fee Letter or the Original Fee Letter and their fees and substance) on the date that is two years following the date of the Original
Commitment Letter.
11
Each Commitment Party, on
behalf of itself and its affiliates, agrees that it will use all non-public information provided to it or its affiliates by or on behalf
of you hereunder solely for the purpose of providing the services which are the subject of this Commitment Letter and shall treat confidentially
all such information and the terms and contents of this Commitment Letter, the Original Commitment Letter, the Fee Letter, the Original
Fee Letter and the Revolving Facility Documentation and shall not publish, disclose or otherwise divulge such information; provided
that nothing herein shall prevent a Commitment Party or its affiliates who are providing services hereunder from disclosing any such
information (a) pursuant to the order of any court or administrative agency or otherwise as required by applicable law, regulation,
compulsory legal process or as requested by a governmental authority (in which case such Commitment Party, to the extent practicable
and so long as you are permitted by law and except in connection with any order or request as part of a regulatory examination or audit,
agrees to inform you promptly thereof), (b) upon the request or demand of any regulatory authority (including any self-regulatory
authority) having jurisdiction over such Commitment Party or any of its affiliates (in which case such Commitment Party agrees to inform
you promptly thereof prior to such disclosure to the extent practicable, unless such Commitment Party is prohibited by applicable law
from so informing you, or except in connection with any request as part of a regulatory examination or audit), (c) to the extent
that such information becomes publicly available other than by reason of disclosure by such Commitment Party or any of its affiliates
in violation of this paragraph, (d) to the extent that such information is received by such Commitment Party from a third party
that is not to such Commitment Party’s knowledge subject to confidentiality obligations to you or the Company, (e) to the
extent that such information is independently developed by such Commitment Party or its affiliates, in each case, without reference to
any confidential information provided to it or them by or on behalf of you, (f) to such Commitment Party’s affiliates and
its and their officers, directors, employees, legal counsel, independent auditors and other experts, professionals, advisors or agents
(collectively, the “ Representatives ”) who need to know such information in connection with the Transactions
and are informed of the confidential nature of such information ( provided that no such disclosure shall be made by the Commitment
Parties, their respective affiliates or any of its or their respective Representatives to any (x) affiliates that are engaged as
principals primarily in private equity, mezzanine financing or venture capital, (y) individuals who are engaged directly or indirectly
in the sale of the Company and its subsidiaries as representatives of the Company (other than, in each case, such persons engaged by
the Company as part of the Company’s transaction and other than a limited number of senior employees who are required, in accordance
with industry regulations or such Commitment Party’s internal policies and procedures to act in a supervisory capacity and the
Commitment Parties’ internal legal, compliance, conflicts, risk management, credit or investment committee members) (collectively,
the “ Excluded Parties ”) or (z) Disqualified Institutions), (g) to prospective Lenders, participants
or assignees or, with the prior consent of the Borrower, any potential counterparty to any swap or derivative transaction relating to
the Borrower or any of its subsidiaries or any of their respective obligations (in each case, other than a Disqualified Institution);
provided that such disclosure shall be made subject to the acknowledgment and acceptance by such prospective Lender, participant,
assignee or counterparty, on behalf of itself and its Representatives, that such information is being disseminated on a confidential
basis (on substantially the terms set forth in this paragraph or as is otherwise reasonably acceptable to you and the Commitment Parties,
including, without limitation, as set forth in any Information Materials) in accordance with the standard syndication process of the
Commitment Parties or market standards for dissemination of such type of information which in the case of any electronic access shall
in any event require “click through” or other affirmative action on the part of the recipient to access such confidential
information, (h) for purposes of establishing a “due diligence” defense, (i) subject to your prior approval of
the information to be disclosed, information supplied on a customary basis to rating agencies in connection with obtaining a rating required
pursuant to this Commitment Letter and/or the Revolving Facility Documentation or (j) with your prior written consent. In addition,
each Commitment Party may disclose the existence of the Revolving Facility and the information about the Revolving Facility and any Other
Facility to market data collectors, similar service providers to the lending industry and service providers to the Commitment Parties
in connection with the administration and management of the Revolving Facility and any Other Facility. Each Commitment Party’s
obligations under this paragraph shall automatically terminate and be superseded by the confidentiality provisions in the definitive
documentation relating to the Revolving Facility and any Other Facility, as applicable, upon the execution and delivery of the definitive
documentation therefor and in any event shall terminate two years from the Original Signing Date. A Commitment Party shall be principally
liable to the extent any confidentiality restrictions set forth herein are violated by one or more of its affiliates or any of its or
their Representatives to whom such Commitment Party has disclosed information pursuant to clause (f) in the proviso in the first
sentence of this paragraph.
12
Nothing in this Commitment
Letter prohibits any party or individual from making a good faith reporting of or otherwise communicating or disclosing possible violations
of law or regulation to any governmental agency or entity, regulatory or self-regulatory authority or making other disclosure under whistleblower
laws or regulations, in each case without any notification to any person.
| 13. | Surviving Provisions . |
The provisions of this Section 13
and the indemnification, confidentiality, jurisdiction, service of process, venue, governing law, absence of advisory or fiduciary duty
and waiver of jury trial, information and syndication provisions contained herein and the fees and governing law provisions contained
in the Fee Letter shall remain in full force and effect regardless of whether definitive financing documentation shall be executed and
delivered and notwithstanding the termination of this Commitment Letter or the Initial Lenders’ commitments hereunder and the Lead
Arrangers’ agreements to provide the services described herein; provided that your obligations under this Commitment Letter,
other than those relating to confidentiality, information and the syndication of the Revolving Facility, shall automatically terminate
and, to the extent covered thereby, be superseded by the definitive documentation relating to the Revolving Facility upon the initial
funding under the Revolving Facility, and you shall be released from all liability in connection therewith at such time. You may terminate
this Commitment Letter and/or, on a pro rata basis, the Initial Lenders’ commitments with respect to the Revolving Facility (or
any portion thereof) hereunder at any time subject to the provisions of the preceding sentence.
| 14. | Patriot Act Notification and Beneficial Ownership Regulation . |
We hereby notify you that
pursuant to the requirements of the USA PATRIOT Act, Title III of Pub. L. 107-56 (signed into law October 26, 2001) (as amended,
the “ Patriot Act ”) and 31 C.F.R. § 1010.230 (as amended, the “ Beneficial Ownership Regulation ”),
each Commitment Party and each Lender is required to obtain, verify and record information that identifies the Borrower and each Guarantor,
which information includes the name, address, tax identification number and other information regarding the Borrower and each such Guarantor
that will allow such Commitment Party or such Lender to identify the Borrower and each such Guarantor in accordance with the Patriot
Act and the Beneficial Ownership Regulation. This notice is given in accordance with the requirements of the Patriot Act and the Beneficial
Ownership Regulation and is effective as to the Commitment Parties and each Lender.
13
| 15. | Acceptance and Termination . |
This Commitment Letter and
the Fee Letter shall become effective upon execution and delivery by all parties hereto and thereto, respectively. This Commitment Letter
and the commitments and undertakings of the Commitment Parties hereunder shall automatically terminate (a) in the event that the
initial borrowing in respect of the Revolving Facility does not occur on or before 5:00 p.m., New York City time on the date that is
5 business days after the Outside Date (as defined in, and as may be extended pursuant to, the Acquisition Agreement as in effect on
the Original Signing Date), unless each of the Commitment Parties shall, in their discretion, agree to an extension, or (b) if earlier,
upon either (i) the valid termination of the Acquisition Agreement in accordance with its terms prior to the closing of the Acquisition
or (ii) the consummation of the Acquisition with or without the use of the Revolving Facility (unless the Commitment Parties have
failed to fund in breach of their obligations hereunder); provided that the termination of any commitment pursuant to this sentence
does not prejudice our or your rights and remedies in respect of any breach of this Commitment Letter.
Each of the parties hereto
agrees that this Commitment Letter and the Fee Letter are a binding and enforceable agreement with respect to the subject matter contained
herein and therein, including an agreement to negotiate in good faith the Revolving Facility Documentation by the parties hereto in a
manner consistent with this Commitment Letter and the Fee Letter, it being acknowledged and agreed that the commitments provided hereunder
by the Commitment Parties are subject only to the Funding Conditions, including the execution and delivery of the Revolving Facility
Documentation (which shall be negotiated in good faith as required by the Documentation Principles) and upon satisfaction (or waiver
by the Commitment Parties) thereof, the initial funding of the Revolving Facility shall occur.
[ Remainder of this page intentionally
left blank ]
14
The Commitment Parties are pleased to have been
given the opportunity to assist you in connection with the financing for the Acquisition.
|
Very truly yours, |
|
|
|
JPMORGAN CHASE BANK, N.A. |
|
|
|
By |
/s/
Gerardo Loera |
|
|
Name: |
Gerardo Loera |
|
|
Title: |
Managing Director |
[SIGNATURE PAGE TO COMMITMENT LETTER]
|
WELLS FARGO BANK, NATIONAL ASSOCIATION |
|
|
|
By |
/s/
Jordan Harris |
|
|
Name: |
Jordan Harris |
|
|
Title: |
Managing Director |
|
|
|
WELLS FARGO SECURITIES LLC |
|
|
|
By |
/s/
Dan Morris |
|
|
Name: |
Dan Morris |
|
|
Title: |
Managing Director |
[SIGNATURE PAGE TO COMMITMENT LETTER]
|
BANK OF AMERICA, N.A. |
|
|
|
By |
/s/
Lex Maultsby |
|
Name: |
Lex Maultsby |
|
Title: |
Managing Director |
|
|
|
BOFA SECURITIES, INC. |
|
|
|
By |
/s/ Lex Maultsby |
|
Name: |
Lex Maultsby |
|
Title: |
Managing Director |
[SIGNATURE
PAGE TO COMMITMENT LETTER]
|
DEUTSCHE BANK AG NEW YORK BRANCH |
|
|
|
By |
/s/
Sandeep Desai |
|
Name: |
Sandeep Desai |
|
Title: |
Managing Director |
|
|
|
By |
/s/ Taylor Pulling |
|
Name: |
Taylor Pulling |
|
Title: |
Director |
|
|
|
DEUTSCHE BANK SECURITIES INC. |
|
|
|
By |
/s/ Sandeep Desai |
|
Name: |
Sandeep Desai |
|
Title: |
Managing Director |
|
|
|
By |
/s/ Taylor Pulling |
|
Name: |
Taylor Pulling |
|
Title: |
Director |
[SIGNATURE PAGE
TO COMMITMENT LETTER]
|
TRUIST BANK |
|
|
|
By |
/s/
Ron Caldwell |
|
Name: |
Ron Caldwell |
|
Title: |
Managing Director |
|
|
|
TRUIST SECURITIES, INC. |
|
|
|
By |
/s/ Ron Caldwell |
|
Name: |
Ron Caldwell |
|
Title: |
Managing Director |
[SIGNATURE PAGE
TO COMMITMENT LETTER]
|
ROYAL BANK OF CANADA |
|
|
|
By |
/s/
Sean Young |
|
Name: |
Sean Young |
|
Title: |
Authorized Signatory |
[SIGNATURE PAGE
TO COMMITMENT LETTER]
|
THE BANK OF NOVA SCOTIA |
|
|
|
By |
/s/
Andreas Pierroutsakos |
|
Name: |
Andreas Pierroutsakos |
|
Title: |
Managing Director |
[SIGNATURE PAGE
TO COMMITMENT LETTER]
|
MIZUHO BANK, LTD. |
|
|
|
By |
/s/
Seth Nadler |
|
Name: |
Seth Nadler |
|
Title: |
Managing Director |
[SIGNATURE PAGE TO COMMITMENT LETTER]
|
CAPITAL ONE, NATIONAL ASSOCIATION |
|
|
|
By |
/s/
James J. Alfonso |
|
Name: |
James J. Alfonso |
|
Title: |
Director |
[SIGNATURE PAGE TO COMMITMENT LETTER]
|
PNC BANK, NATIONAL ASSOCIATION |
|
|
|
By |
/s/
Jack Broeren |
|
Name: |
Jack Broeren |
|
Title: |
Executive Vice President |
|
|
|
PNC CAPITAL MARKETS LLC |
|
|
|
By |
/s/ William Bobrow |
|
Name: |
William Bobrow |
|
Title: |
Managing Director |
[SIGNATURE PAGE TO COMMITMENT LETTER]
|
FIFTH THIRD BANK, NATIONAL ASSOCIATION |
|
|
|
By |
/s/
Andrew Healy |
|
Name: |
Andrew Healy |
|
Title: |
Director |
[SIGNATURE PAGE TO COMMITMENT LETTER]
Accepted and agreed to as of |
|
the date first above written: |
|
|
|
STALLION INTERMEDIATE CORPORATION |
|
|
|
By |
/s/
Ting Gu |
|
|
Name: |
Ting Gu |
|
|
Title: |
Vice President and Secretary |
|
[SIGNATURE PAGE TO COMMITMENT LETTER]
Schedule 1
Commitment Party | |
Facility | |
JPMCB | |
| 14.5833334 | % |
WF Bank | |
| 12.9166668 | % |
BANA | |
| 10.0000000 | % |
DBNY | |
| 10.0000000 | % |
Truist | |
| 10.0000000 | % |
RBC | |
| 8.3333333 | % |
Scotia | |
| 8.3333333 | % |
Mizuho | |
| 8.3333333 | % |
Capital One | |
| 5.8333333 | % |
PNC | |
| 5.8333333 | % |
Fifth Third | |
| 5.8333333 | % |
Total | |
| 100.0000000 | % |
EXHIBIT A
Project Stallion
$1,000 Million Senior Secured Revolving Loan Facility
Transaction Description 1
It is intended that:
(a) Pursuant
to and subject to the terms and conditions set forth in the Acquisition Agreement, Stallion MergerSub Corporation, a Delaware corporation
and newly formed subsidiary of Newco, will merge with and into the Company, with the Company surviving as a wholly owned direct or indirect
subsidiary of Newco. Newco will directly or indirectly acquire (the “ Acquisition ”) the Borrower pursuant to
the Acquisition Agreement and, upon consummation of the Acquisition, the Borrower shall become a wholly owned subsidiary of Newco;
(b) Newco
(or one of its subsidiaries) will, at its option, either (i) issue an aggregate principal amount of its senior notes (the “ Senior
Notes ”) generating up to $1,000,000,000 in gross proceeds in a Rule 144A or other private placement or (ii) to
the extent Newco or its subsidiary, as applicable, does not receive such amount of gross proceeds of the Senior Notes on or prior to
the Closing Date (as defined below), obtain up to $1,000,000,000 (less the gross proceeds from the Senior Notes issued on the Closing
Date) of commitments to provide senior secured increasing rate loans (the “ Revolving Loans ”) under a new senior
secured credit facility (the “ Revolving Facility ”); and
(c) the Investors will
directly or indirectly contribute to Newco an aggregate amount of cash equity (which, in respect of any equity other than common stock,
shall be on terms reasonably acceptable to the Lead Arrangers) (collectively, the “ Equity Contribution ”) that,
when aggregated with the amount of rollover equity of existing shareholders of the Company, represents not less than 25% of the sum of
(1) the aggregate gross proceeds of the loans borrowed under the Revolving Facility and any Other Facility, (2) the aggregate
principal amount of other indebtedness for borrowed money of the Company and its subsidiaries on a consolidated basis outstanding on
the Closing Date immediately after giving effect to the Transactions, (3) the aggregate gross proceeds of the Senior Notes issued
and (4) the amount of such cash equity contributed, in each case on the Closing Date (such sum, the “ Funded Capitalization ”).
The transactions described
above, together with the transactions related thereto, are collectively referred to herein as the “ Transactions ”.
This Exhibit A , the Revolving Facility Term Sheet and the Additional Conditions Precedent attached hereto as Exhibit C
are collectively referred to herein as the “ Term Sheet ”. The Revolving Facility Documentation is referred to
herein as the “ Revolving Facility Documentation . ” For purposes of this Commitment Letter, “ Closing
Date ” shall mean the date of the initial funding under the Revolving Facility and/or the date on which the proceeds of
the Senior Notes or any Other Facility are used to fund a portion of the consideration in connection with the Acquisition and the consummation
of the Acquisition.
1 All capitalized terms used but not
defined herein have the meanings given to them in the Commitment Letter to which this Exhibit is attached, including the Exhibits thereto.
In the event any such capitalized term is subject to multiple and differing definitions, the appropriate meaning thereof in this Exhibit
shall be determined by reference to the context in which it is used.
A- 1
EXHIBIT B
Project Stallion
$1,000 Million Senior Secured Revolving Loan Facility
Summary of Principal Terms and Conditions 2
Borrower : |
Select Medical
Corporation, a Delaware corporation |
Administrative Agent : |
JPMCB
will act as sole and exclusive administrative agent (in such capacity, the “ Administrative Agent ”) for
a syndicate of banks, financial institutions and institutional lenders excluding any Disqualified Institutions and otherwise reasonably
acceptable to the Borrower (together with the Initial Lenders, the “ Lenders ”) and will perform the duties
customarily associated with such role. |
Bookrunners and Lead
Arrangers : |
JPMCB,WF
Securities, BAS, DBSI, Truist Securities, RBC, Scotia, Mizuho, Capital One, Fifth Third and PNC Capital Markets will act as joint
lead arrangers for the Revolving Facility (the “ Lead Arrangers ”) and as joint bookrunners, and will perform
the duties customarily associated with such roles. |
Revolving Loans : |
Senior
Secured Increasing Rate Bridge Loans (the “ Revolving Loans ”) in an aggregate principal amount outstanding
at any time not to exceed the amount of the Commitments (as defined below). |
Uses of Proceeds : |
The
proceeds of the Revolving Loans will be used by the Borrower on the Closing Date, together with the proceeds of the Equity Contribution,
cash on hand of the Company and its subsidiaries and the Senior Notes (if any) and any Other Facility (if any), solely to pay the
consideration for the Acquisition and to pay fees, costs and expenses related to the Transactions. Proceeds of Revolving
Loans funded after the Closing Date will be used for general corporate purposes. |
Principal Amount : |
On the Closing Date, $1,000
million of revolving commitments (the “ Commitments ”) minus the gross proceeds from (i) any issuance
of the Senior Notes issued on or prior to the Closing Date and (ii) borrowings under any Other Facility established following
the date of the Commitment Letter and on or prior to the Closing Date; provided that any amount of the Commitments that is
not funded on the Closing Date shall terminate on the Closing Date such that, after giving effect to the funding of Revolving Loans
on the Closing Date and any such termination, the aggregate principal amount of Commitments outstanding on the Closing Date shall
equal the aggregate principal amount of Revolving Loans funded on the Closing Date. Revolving Loans may be borrowed and
prepaid from time to time on or after the Closing Date so long as after giving effect to any borrowing of Revolving Loans, the aggregate
principal amount of Revolving Loans does not exceed the aggregate principal amount of Commitments then in effect |
2 All capitalized terms used but not defined herein have the meanings given to them
in the Commitment Letter to which this Term Sheet is attached, including the Exhibits thereto. In the event any such capitalized term
is subject to multiple and differing definitions, the appropriate meaning thereof in this Exhibit shall be determined by reference to
the context in which it is used.
B- 1
EXHIBIT B
Security : |
All
obligations of the Borrower and the Guarantors under the Revolving Facility (the “ Revolving Facility Obligations ”)
will constitute senior secured indebtedness of the Borrower and the Guarantors and will be secured on a pari passu basis by
all assets of the Borrower and the Guarantors (collectively, the “ Collateral ”) that secure obligations
under the Existing Credit Agreement (together with any secured indebtedness refinancing the Existing Credit Agreement, the “ Credit
Agreement ”); provided that Mortgaged Property (as defined in the Credit Agreement) located in a special flood
hazard area shall not constitute Collateral unless such property is covered by all insurance required to be maintained in connection
therewith pursuant to Section 5.07(b) of the Credit Agreement. Any lien on any Collateral securing the Revolving
Facility will be automatically released upon the release of the corresponding liens securing the Credit Agreement (other than upon
payment in full thereof). The relative rights of the secured parties under the Revolving Facility and the secured parties
under the Credit Agreement will be set forth in a First Lien Intercreditor Agreement (as defined in the Existing Credit Agreement)
in form reasonably satisfactory to the Borrower and the Administrative Agent. |
Guarantees : |
Select
Medical Holdings Corporation (“ Holdings ”) and each subsidiary of the Borrower that is a guarantor under
the Credit Agreement (the “ Subsidiary Guarantors ” and, together with Holdings, the “ Guarantors ”)
will jointly and severally guarantee the Revolving Facility Obligations on a senior secured basis. Any guarantee will
be automatically released upon the release of the corresponding guarantee under the Credit Agreement (other than upon payment in
full thereof). |
Interest Rates : |
Interest for the first three-month period
commencing on the Closing Date shall be payable in respect of Revolving Loans at (a) Term SOFR (as defined below) plus (b) 275
basis points (the “ Initial Margin ”). On the date that is one month after the Closing Date, such spread
over Term SOFR will increase by 50 basis points and shall increase by an additional 50 basis points at the end of each month thereafter
so long as the Revolving Loans are outstanding.
“ Term SOFR ” means
the Term SOFR Reference Rate at approximately 5:00 a.m., Chicago time, two U.S. Government Securities Business Days (as defined in
the Existing Credit Agreement) prior to the first day of the interest period for a three month interest period as such rate is published
by the CME Term SOFR Administrator (as defined in the Existing Credit Agreement); provided that in no event shall Term SOFR
be less than 0%.
Notwithstanding anything to the contrary
set forth above, at no time shall the per annum interest rate on the Revolving Loans exceed the Total Cap (as defined in the Fee
Letter).
|
|
Interest on the Revolving
Loans will be calculated based on a year of 360 days and shall be payable for the actual number of days elapsed. |
B- 2
EXHIBIT B
Interest
Payments : |
Interest
on the Revolving Loans will be payable in cash, quarterly in arrears on the last day of each interest period. |
Commitment Fees: |
An
undrawn commitment fee will accrue on the average daily amount by which the aggregate Commitments exceed the aggregate principal
amount of outstanding Revolving Loans at a per annum rate (calculated based on a year of 360 days and payable for the actual number
of days elapsed) at the Commitment Fee Rate (as defined in the Fee Letter). Such commitment fee shall be due and payable
quarterly in arrears on the 15 th day following the last day of each calendar quarter. |
Default Rate : |
The
applicable interest rate plus 2.0% on overdue amounts. |
Maturity : |
The
Revolving Loans will mature on December 3, 2031. |
Mandatory Prepayments : |
Same
as in the Existing Credit Agreement. |
Optional Reductions
of Commitments and Prepayments : |
The
Revolving Loans may be voluntarily prepaid and the unutilized portion of the Commitments may be voluntarily reduced at any time,
in whole or in part, at the option of the Borrower and without premium or penalty upon not less than three business days’ prior
written notice, subject to, in the case of prepayment of Revolving Loans, payment of accrued and unpaid interest and applicable breakage
costs; provided that the Borrower shall not reduce the Commitments to the extent that after giving effect to such reduction
and any related prepayment of Revolving Loans, the aggregate principal amount of outstanding Revolving Loans would exceed the aggregate
principal amount of Commitments. |
Right to Resell Revolving Loans : |
Each Lender shall have the right to resell
or assign the Commitments and Revolving Loans held by it in compliance with applicable law to any third party at any time (other
than to any Disqualified Institution that has been identified to all Lenders or natural persons), in consultation with (but without
the consent of) the Borrower but, in the case of any assignment to any party that is not an existing Lender, with the consent of
the Administrative Agent (not to be unreasonably withheld, conditioned or delayed); provided that, for the twelve month period
commencing on the Closing Date, unless a payment or bankruptcy event of default has occurred and is continuing, the consent of the
Borrower (not to be unreasonably withheld, conditioned or delayed) shall be required with respect to any assignment that would result
in the Initial Lenders holding less than a majority of the aggregate outstanding principal amount of the Commitments and Revolving
Loans.
The Lenders will be permitted to sell participations
in the Commitments and Revolving Loans without restriction (other than to any Disqualified Institution to the extent the list of
Disqualified Institutions has been made available to all Lenders). Voting rights of participants shall be limited to matters in respect
of (a) reductions of principal, interest or fees of the commitments participated to such participants, (b) extensions of
final maturity of the Revolving Loans, (c) releases of all or substantially all the guarantors or all or substantially all of
the Collateral or subordination of the Revolving Facility Obligations or the liens on all or substantially all of the Collateral
to any other indebtedness or liens securing such indebtedness, as applicable and (d) changes in voting provisions. Participants
will have customary rights with respect to yield protection and increased costs.
|
B- 3
EXHIBIT B
Conditions
Precedent to Initial Borrowing of Revolving Loans : |
Subject
to the Certain Funds Provision, the borrowing of the Revolving Loans on the Closing Date will be subject only to the conditions precedent
set forth in Section 6 of the Commitment Letter and Exhibit C thereto. |
Conditions
Precedent to Borrowing of Revolving Loans following the Closing Date : |
Any
borrowing of Revolving Loans following the Closing Date will be subject to conditions consistent with those set forth in Section 4.02
of the Existing Credit Agreement. |
Revolving Facility Documentation : |
The definitive documentation
relating to the Revolving Loans (the “ Revolving Facility Documentation ”) shall (i) be consistent with
this Term Sheet and shall contain only those payments, conditions to borrowing, mandatory prepayments, representations, warranties,
covenants and events of default expressly set forth in this Exhibit B applicable to the Borrower and its restricted subsidiaries
(and, in certain cases consistent with the Existing Credit Agreement, Holdings), be usual and customary for facilities of such kind
with high yield style covenants and be based on the Borrower’s Indenture (the “ Existing Indenture ”),
dated as of December 3, 2024, by and among the Borrower, the guarantors party thereto and U.S. Bank Trust Company, National
Association, as trustee, with modifications based on the Existing Credit Agreement to reflect the secured nature of the Revolving
Facility (including the same maturity requirements for other indebtedness and same pari passu secured debt capacity as are applicable
under the Existing Credit Agreement as in effect on the date of the Commitment Letter) and the Revolving Facility’s nature
as a credit agreement and to reflect the financial maintenance covenant applicable to the revolving credit facility under the Existing
Credit Agreement and to eliminate the ability to treat the issuance of preferred stock of a subsidiary as an asset sale, (ii) reflect
the operational and strategic requirements of the Borrower and its subsidiaries in light of their size, geographic locations, industries,
businesses and business practices, operations, financial accounting, matters disclosed in the Acquisition Agreement and the proposed
business plan, (iii) be subject to materiality qualifications and other exceptions that give effect to and/or permit the Transactions,
(iv) reflect reasonable administrative, agency and operational requirements of the Administrative Agent and (v) be negotiated
in good faith to finalize the Revolving Facility Documentation, giving effect to the Certain Funds Provision (as defined in the Commitment
Letter), as promptly as reasonably practicable (collectively, the “ Documentation Principles ”). Standards,
qualifications, thresholds, exceptions, “baskets” and grace and cure periods shall be consistent with the Documentation
Principles. Counsel for the Borrower shall initially draft the Revolving Facility Documentation consistent with the Documentation
Principles. |
B- 4
EXHIBIT B
Representations
and Warranties : |
The
Revolving Facility Documentation will contain representations and warranties relating to the Borrower and its restricted subsidiaries
(and, where applicable, Holdings) as are substantially similar to those for the Existing Credit Agreement, with modifications customary
for Revolving Loan financings of this type to the extent necessary to reflect differences in documentation (and in any event such
representations and warranties shall not be more restrictive to the Borrower than those set forth in the Existing Credit Agreement). |
Covenants : |
The
Revolving Facility Documentation will contain such affirmative covenants as are customary for Revolving Loan financings of this type
and substantially similar to those in the Existing Indenture (with modifications consistent with the Existing Credit Agreement to
the extent relevant to the secured nature of the Revolving Facility), and the Revolving Facility Documentation will contain incurrence-based
negative covenants customary for high yield senior secured debt securities (but in any event no more restrictive to the Borrower
than those in the Existing Indenture and the Existing Credit Agreement). |
Events
of Default : |
The Revolving Facility Documentation will
contain such events of default (including notice and grace periods) as are customary for high yield senior secured debt securities
(but in any event no less favorable to the Borrower than those in the Existing Credit Agreement), consisting of nonpayment of principal,
interest or other amounts; violation of covenants; incorrectness of representations and warranties in any material respect; change
of control; cross acceleration and cross payment default to other indebtedness subject to a threshold amount; bankruptcy events or
other insolvency events; material monetary judgments subject to a threshold amount; and invalidity (actual or asserted in writing
by the Borrower or any Guarantor) of material guarantees or collateral.
Events of Default shall be subject to customary
materiality qualifiers, “baskets”, grace periods and other exceptions consistent with the Documentation Principles.
|
Voting : |
Amendments
and waivers of the Revolving Facility Documentation will require the approval of Lenders holding more than 50% of the aggregate principal
amount of the Commitments and Revolving Loans, except that the consent of each Lender directly adversely affected thereby shall be
required with respect to (a) reductions of principal, interest or fees payable to such Lender, (b) extensions of final
maturity of the Revolving Loans of such Lender or the due date of any interest or fee payment, (c) releases of all or substantially
all of the guarantors or all or substantially all of the Collateral or subordination of the Revolving Facility Obligations or the
liens on all or substantially all of the Collateral to any other indebtedness or liens securing such indebtedness, as applicable
and (d) changes in voting thresholds. |
Cost and Yield Protection : |
Customary for financings of this kind, it
being agreed that the documentation will provide customary provisions regarding withholding and other tax liabilities and that the
gross-up obligations shall not apply to U.S. federal withholding taxes imposed by Sections 1471 through 1474 of the Internal Revenue
Code as of the Closing Date (and any amended or successor provisions that are substantively comparable and not materially more onerous
to comply with) and any regulations promulgated thereunder or guidance issued or intergovernmental agreements entered into pursuant
thereto.
|
B- 5
EXHIBIT B
Expenses
and Indemnification : |
The Borrower shall pay or reimburse (a) if
the Closing Date occurs, all reasonable and documented out-of-pocket expenses of the Administrative Agent and the Lead Arrangers
(within 30 days after receipt of a written demand therefor, together with reasonably detailed backup documentation supporting such
reimbursement request) associated with the syndication of the Revolving Loans and the preparation, execution, delivery and administration
of the Revolving Facility Documentation and any amendment or waiver with respect thereto (but limited, in the case of legal fees
and expenses, to the reasonable documented and out-of-pocket fees, disbursements and other charges of one counsel to the Administrative
Agent and the Lead Arrangers identified in the Commitment Letter taken as a whole and, if reasonably necessary, of one local counsel
to the Administrative Agent and the Lead Arrangers identified in the Commitment Letter taken as a whole in any relevant jurisdiction
and, in the event that the Administrative Agent or any Lead Arranger is advised by counsel that there are conflicts of interest,
one additional counsel in each relevant jurisdiction for each group of similarly situated parties taken as a whole) and (b) if
the Closing Date occurs, all reasonable and documented out-of-pocket expenses of the Administrative Agent and the Lenders within
30 days after the receipt of a written demand therefor, together with reasonably detailed backup documentation supporting such reimbursement
request (but limited, in the case of legal fees and expenses, to the reasonable documented and out-of-pocket fees, disbursements
and other charges of one counsel to the Administrative Agent and the Lenders taken as a whole, and, if reasonably necessary, of one
local counsel to the Administrative Agent and the Lenders taken as a whole in any relevant jurisdiction) incurred in connection with
the enforcement of any rights or remedies under the Revolving Facility Documentation or protection of rights thereunder.
|
B- 6
EXHIBIT B
|
The Administrative Agent, the Lead Arrangers and the Lenders
(and their affiliates and their respective officers, directors, members, partners, employees, advisors, agents and other representatives)
(each, an “ indemnified person ”) will be indemnified for and held harmless against, any losses, claims, damages,
or other liabilities of any kind or out-of-pocket expenses (but limited, in the case of legal fees and expenses, to the reasonable
documented and out-of-pocket fees, disbursements and other charges of one counsel to the indemnified persons taken as a whole and,
in the case an indemnified person is advised by counsel that there is a conflict of interest, one additional counsel in each relevant
jurisdiction to each similarly affected group of indemnified persons taken as a whole, and, if reasonably necessary, one local counsel
to all indemnified persons taken as a whole in any relevant jurisdiction) incurred in connection with, or as a result of, the performance
by the parties to the Revolving Facility Documentation, the performance of the parties to the Revolving Facility Documentation of their
respective obligations thereunder or the consummation of the transactions contemplated thereby, any Revolving Loan or the use or the
proposed use of proceeds thereof, or any actual or prospective claim, litigation, investigation or proceeding relating to any of the
foregoing, except to the extent they arise from (i) the gross negligence, bad faith or willful misconduct of, or material breach
of any obligations under any of the Revolving Facility Documentation by, the relevant indemnified person or any of its Related Indemnified
Persons or (ii) any dispute solely among the indemnified persons other than any claims against an indemnified person in its capacity
as an administrative agent or arranger or any similar role under the Revolving Facility and other than any claims arising out of any
act or omission of the Borrower or any of its affiliates, in the case of each of clauses (i) and (ii), as determined by a final,
non-appealable judgment of a court of competent jurisdiction; provided that the Borrower shall not be liable for any indirect,
special, punitive or consequential damages (other than in respect of any such damages incurred or paid by an indemnified person to
a third party). Notwithstanding the foregoing, each indemnified person (and its Related Indemnified Persons) shall be obligated to
refund and return promptly any and all amounts paid by the Borrower or any of its affiliates under this paragraph to such indemnified
person (or its Related Indemnified Persons) for any such fees, expenses or damages to the extent such indemnified person is not entitled
to payment of such amounts in accordance with the terms hereof. |
Governing
Law : |
New York. |
Counsel to the Commitment
Parties and Lead Arrangers : |
Paul Hastings LLP. |
B- 7
CONFIDENTIAL |
EXHIBIT C |
Project Stallion
$1,000 million Senior Secured Revolving Facility
Conditions Precedent 3
Except as otherwise set forth
below, subject in all respects to the Certain Funds Provision, the initial borrowing on the Closing Date under the Revolving Facility
shall be subject to the following conditions precedent:
1. Since
the date of the Acquisition Agreement, no Company Material Adverse Effect shall have occurred.
2. The
Acquisition shall have been consummated, or shall be consummated substantially concurrently with the initial borrowing under the Revolving
Facility in accordance with the Acquisition Agreement. The Acquisition Agreement shall not have been amended or waived, and no consents
shall have been given with respect thereto, in a