Five months after its first filing for an initial public offering, Select Medical Corp., Mechanicsburg, Pa., has submitted its fourth filing to federal security regulators because of a change in underwriters.
Select Medical, which operates 54 long-term-care hospitals and 593 outpatient rehabilitation centers in the U.S., hopes to raise up to $162.5 million in a two-part offering. No date has been set for selling the shares.
Select Medical, which also operates 86 rehabilitation centers in Canada, plans to issue more than 10.6 million shares to investors in the U.S. and Canada. It intends to sell nearly 1.9 million shares to overseas investors at the same time. The offerings are expected to garner $11 to $13 per share.
The company cut its loss to $3.1 million, or 12 cents per share, in 2000, compared with $18.3 million, or 74 cents per share, in 1999. Revenue rose 77% to $805.9 million.
The company has grown in large part through three acquisitions. In November 1999, Select Medical bought the rehabilitation and occupational health division of NovaCare, King of Prussia, Pa., for $200 million. In December 1998, Select Medical paid $103.6 million for Intensiva Healthcare, St. Louis, which operated 22 specialty acute-care hospitals. Select Medical also purchased American Transitional Hospitals, a subsidiary of Fort Smith, Ark.-based Beverly Enterprises, for $62.8 million in June 1998. American Transitional operated 15 specialty acute-care hospitals.
Fifty-two of the company's 54 long-term-care hospitals take the "hospital within a hospital" form, or separately licensed long-term-care units within acute-care hospitals. Select Medical hopes to open about 10 such units each year, targeting hospitals of 250 beds or more in markets of at least 500,000 people.
The company was formed in December 1996 and began operations two months later by purchasing all of the stock of the former Sports and Orthopedic Rehabilitation Services. Select Medical is led by longtime healthcare executive Rocco A. Ortenzio, who is a co-founder, chairman and chief executive officer of the company. Ortenzio, 69, has founded three other rehabilitation providers since 1969, including Continental Medical Systems, which merged with Horizon Healthcare in 1995.
Select Medical's balance sheet carries about $284 million in long-term debt, compared with a total capitalization of $462.1 million, as of Dec. 31, 2000. The company expects to net $137.5 million from the offering, after covering underwriting commissions and other expenses, according to its most recent IPO filing with the U.S. Securities and Exchange Commission, dated March 7.