Select Medical Reports Mixed Q1 Earnings, Provides Further Details on Pending $16.50/Share Acquisition
SEM sits 41% above its 52-week low of $11.65.
Summary
Select Medical Holdings Corp. filed its Q1 2026 earnings report, showing revenue growth but a decline in net income and Adjusted EBITDA, while also reiterating and detailing its definitive merger agreement to be acquired for $16.50 per share.
Key Events · Earnings and Guidance · SEM
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Mixed Q1 2026 Financial Results
Revenue increased 5.0% to $1.42 billion, but net income decreased 14.7% to $63.8 million, and Adjusted EBITDA fell 6.5% to $141.6 million year-over-year.
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Significant Operating Cash Flow Improvement
Net cash provided by operating activities significantly improved to $37.9 million in Q1 2026, compared to cash used of $3.5 million in Q1 2025.
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Merger Agreement Details Confirmed
The company confirmed its definitive merger agreement from March 2, 2026, to be acquired for $16.50 per share in cash, with the HSR waiting period expiring on April 27, 2026.
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Acquisition Financing and Termination Fees
The acquisition includes an $880 million equity financing commitment, with termination fees of $66.5 million payable by the company and $133.0 million by the parent under specified conditions.
Analysis · SEM · Industrial Applications And Services
This 10-Q provides the first-quarter 2026 financial results for Select Medical Holdings Corp., showing a 5.0% increase in revenue to $1.42 billion, but a 14.7% decrease in net income and a 6.5% decrease in Adjusted EBITDA compared to the prior year. Operating cash flow, however, significantly improved to $37.9 million from a negative $3.5 million. The filing also reiterates and expands upon the definitive merger agreement announced on March 2, 2026, under which the company will be acquired for $16.50 per share in cash. Key updates include the expiration of the Hart-Scott-Rodino waiting period on April 27, 2026, and details on the $880 million equity financing commitment and termination fees. While the Q1 financial performance is mixed, the market's focus remains on the pending acquisition, which is trading close to the offer price.
At the time of this filing, SEM was trading at $16.41 on NYSE in the Industrial Applications And Services sector, with a market capitalization of approximately $2B. The 52-week trading range was $11.65 to $18.53. This filing was assessed with neutral market sentiment and an importance score of 7 out of 10.