While the rehabilitation therapy world is still reverberating from the announcement that Select Rehabilitation has agreed to purchase larger rival RehabCare, leaders of the projected behemoth say there should be no ripple effects felt by involved therapists or patients on the front lines.
A Select Rehab executive told McKnight’s Long-Term Care News that cursory antitrust and regulatory reviews should be completed by the end of the year, hopefully sooner so the deal can close by the beginning of December. A definitive agreement was signed Saturday.
Although many operations details have not been determined —partly due to a “quiet period” leading up to the deal closing — Select leaders know they have latched on to a long-coveted prize, said Shelley Wisnowski, the company’s senior vice president of business development.
Select Rehab believes itself to be the largest privately held contract therapy company in the U.S. today, and tacking on RehabCare should make it the largest in post-acute care, and one of the largest of any kind in the country, observers say.
“We’ve gotten a lot of congratulations,” Wisnowski acknowledged about Monday’s blockbuster announcement. “RehabCare has been the giant in this business for a long time. I think people felt like we swallowed a whale or something like that. The most common reaction is, ‘How did you pull that off?’”
As it turns out, by playing their cards close to the vest. Only Select co-founders Neal Deutsch and Anna Gardina Wolfe, the company’s current chairman and CEO, respectively, know some details of the deal Wisnowski said on Tuesday.
Financial terms have not been disclosed, but Wisnowski said the deal had been in the works for “at least six or seven months” after Deutsch started exploring specific options. Kindred HealthCare, RehabCare’s parent, had announced in 2017 its intention to exit the skilled nursing market altogether. Last year, it sold off the last of what had been a chain of more than 200 nursing homes.
Nearly 9,000 RehabCare employees could find a very welcome home with Glenview, IL-based Select, Wisnowski said. The combined companies will serve nearly 2,400 locations in 43 states and employee about 17,000 therapists, she explained.
“We don’t anticipate any changes at the field level,” she said. “Until the deal closes, we don’t have as many specifics on their business as we’d like, but our goal would be to keep RehabCare’s therapy and management team intact. RehabCare has been a very respected competitor of ours for years and years.”
Growing the footprint
Coverage locations will include skilled nursing facilities, assisted and independent living facilities, continuing care retirement communities, home health operations and schools.
“A big impetus behind this acquisition is we would like to expand our footprint,” Wisnowski acknowledged. She said that Select currently offers services in schools and home health settings, but they should grow significantly after the deal closes. An ongoing drive to expand in assisted living settings also should intensify.
Wisnowski shrugged off concerns about therapy’s prospects after the onset of the Patient Driven Payment Model 12 months ago, or the coronavirus pandemic.
“When you look at the baby boomers and what’s coming , the tsunami, there’s going to be a lot more people we have to serve,” she said. “Maybe it means a lot more in settings like assisted living, independent living or home health, but there will be a lot of people who need our services, and that’s not going away. To us, there are needs out there that aren’t being met.”
Select has not made many acquisitions over the last decade, and certainly nothing near this size, Wisnowski said. The co-founders “tend to keep pretty quiet about what they do,” she noted. “They always grow responsibly. They’ll never bite off more than they can chew. They’ve been very true to their word on that.”
A definitive agreement was signed Saturday, with a lot of other “paperwork” exchanging hands before then. Wisnowski added that more details will be disclosed after custom closing conditions are met, including the expiration of what should be an uneventful waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.