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SEM > SEC Filings for SEM > Form 8-K on 4-Mar-2014All Recent SEC Filings

Show all filings for SELECT MEDICAL HOLDINGS CORP

Form 8-K for SELECT MEDICAL HOLDINGS CORP


4-Mar-2014

Entry into a Material Definitive Agreement


Item 1.01 Entry into a Material Definitive Agreement

On February 26, 2014, Select Medical Holdings Corporation ("Holdings") entered into a Stock Purchase Agreement (the "Agreement") with Welsh, Carson, Anderson & Stowe IX, L.P. and WCAS Capital Partners IV, L.P. (together, "Welsh Carson") providing for Holdings to repurchase 10,000,000 shares of its common stock at a price of $10.95 per share for an aggregate purchase price of $109.5 million. The closing of the transactions under the Agreement is scheduled to occur on the later of (i) two business days after the date on which Welsh Carson has been advised by Holdings' transfer agent that the relevant share certificates have been received by the transfer agent and (ii) effectiveness of Amendment No. 5 summarized below. Following the consummation of the transactions contemplated by the Agreement, Welsh Carson and their affiliate, WCAS Management Corporation (together, the "Welsh Carson Affiliates") will continue to own a substantial portion of Holdings' common stock. Two of Holdings' directors, Russell L. Carson and Thomas A. Scully, are general partners of the Welsh Carson Affiliates.

On March 4, 2014, Select Medical Corporation ("Select") and Holdings entered into Amendment No. 5 (the "Amendment") to Select's senior secured credit facility with JPMorgan Chase Bank, N.A., as administrative agent. The Amendment
(1) converted the remaining Series B Term Loan to a new term loan tranche, which we refer to as the Series D Term Loan, and lowered the interest rate payable on the Series D Term Loan from Adjusted LIBO plus 3.25%, or Alternate Base Rate plus 2.25%, to Adjusted LIBO plus 2.75%, or Alternate Base Rate plus 1.75%,
(2) set the maturity date of the Series D Term Loan at December 20, 2016,
(3) converted the remaining Series C Term Loan to a new term loan tranche, which we refer to as the Series E Term Loan, and lowered the interest rate payable on the Series E Term Loan from Adjusted LIBO plus 3.00% (subject to an Adjusted LIBO rate floor of 1.00%), or Alternate Base Rate plus 2.00%, to Adjusted LIBO plus 2.75% (subject to an Adjusted LIBO rate floor of 1.00%), or Alternate Base Rate plus 1.75%, (4) set the maturity date of the Series E Term Loan at June 1, 2018, (5) beginning with the first quarter ending March 31, 2014, increased the quarterly compliance threshold set forth in the leverage ratio financial maintenance covenant to a level of 5.00 to 1.00 from 4.50 to 1.00, (6) provided for a prepayment premium of 1.00% if the senior secured credit facilities are amended at any time prior to September 4, 2014 in the case of the Series D Term Loans and March 4, 2015 in the case of the Series E Term Loans and such amendment reduces the yield applicable to such loans, (7) amended the definition of "Available Amount" in a manner the effect of which was to increase the amount available for investments, restricted payments and the payment of specified indebtedness and (8) made certain other technical amendments. These changes provide Holdings and Select with additional flexibility to make certain restricted payments, including the repurchase of common stock under the Agreement.


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