Dechert LLP is advising Concentra Group Holdings, LLC and Select Medical Holdings Corporation in connection with a definitive agreement pursuant to which Select Medical and Dignity Health will combine Concentra, an occupational medicine and urgent care service provider, with U.S. HealthWorks, Inc., a subsidiary of Dignity Health Holdings Company (“DHHC”), also a service provider in this sector.
Subject to the satisfaction of closing conditions, the transaction will occur through an equity purchase and contribution agreement, whereby Concentra will acquire all of the issued and outstanding shares of stock of U.S. HealthWorks from DHHC. Following the closing of the transaction, Dignity Health will own a 20% equity interest in the combined entity holding Concentra and U.S. HealthWorks.
U.S. HealthWorks is an operator of occupational healthcare centers with approximately 250 medical and onsite clinics in 21 states. Concentra was created through a joint venture between Select Medical Corporation (“SMC”), a wholly-owned subsidiary of Select Medical, Welsh, Carson, Anderson & Stowe XII, L.P. (“WCAS”) and other minority equity holders including Cressey & Company. Dechert also represented Select Medical in this transaction.
The transaction values U.S. HealthWorks at $753 million, subject to certain adjustments in accordance with the terms set forth in the purchase agreement. Dignity Health will receive a 20% equity interest in the combined entity, valued at $238 million, and the remainder of the purchase price in cash. In connection with closing the transaction, Concentra will also redeem certain of its outstanding equity interests from the existing minority equity holders (including WCAS and Cressey), such that SMC will retain a majority voting interest in the combined entity following the closing of the transaction. The transaction, which is targeted to close in the first quarter of 2018, is subject to a number of closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
The Dechert team advising Concentra and Select Medical includes partners Stephen Leitzell and Sarah Gelb and associates Jonathan Stott and Francesco Salpietro (corporate); partner James Fishkin and associate Konstantin Medvedovsky (antitrust); partner Edward Lemanowicz and associate Amanda Reed (tax); partner Abbi Cohen (environmental); partner Thomas Rayski (intellectual property); partner Eric Rubin and associates Andrew Braid and Michael Binko (employee benefits); counsel Ian Downes and associate Rhiannon DiClemente (labor and employment); and counsel Francois Quintard-Morenas (real estate).
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