Welsh Carson leads $2.3bn hospital deal

Thoma Cressey and the management of Select Medical are joining Welsh Carson in a major public-to-private transaction of the Pennsylvania specialty-hospital operator.

New York private equity firm Welsh Carson Anderson & Stowe today announced an agreement to take private hospital operator Select Medical in a deal worth approximately $2.3 billion (€1.84 billion).

Chicago private equity firm Thoma Cressey Equity Partners will join Welsh Carson in the deal, as will members of the company’s senior management, according to a press release.

In 1997, then-private Select Medical first received a $56 million equity commitment from Thoma Cressey (then called Golder, Thoma, Cressey, Rauner), Welsh Carson and Rocco and Robert Ortenzio, the founders of the company and current executive chairman and CEO, respectively. The company went public in 2001.

Terms of the deal call for public shareholders in Select Medical to receive $18 per share, representing a 36 percent premium to the company’s average share closing price over the past 30 trading days.

Select Medical operates 83 long-term acute care hospitals in 25 states. The Mechanicsburg, Pennsylvania company also operates 761 outpatient centers across the US and Canada.