Key Takeaways:
The law firm of Wohl & Fruchter LLP is investigating the fairness of the proposed sale of Cross Country Healthcare (Nasdaq: CCRN) to private equity firm Knox Lane for $13.25 per share.
The investigation centers on whether the $437 million acquisition price adequately values the healthcare staffing company, according to a statement from the law firm. The probe will assess the board's process and whether it secured the best possible price for shareholders. Another firm, The Schall Law Firm, has also announced a similar investigation on behalf of investors.
Knox Lane's all-cash offer of $13.25 per share represented a 31 percent premium to Cross Country's closing price on May 6, 2026. The deal announcement came just months after a proposed merger between Cross Country and its larger rival, Aya Healthcare, was terminated. Following the termination, Cross Country saw several executive changes, including the return of co-founder Kevin Clark as CEO.
The deal with Knox Lane is expected to close in the third quarter of 2026, but the shareholder investigations introduce a new layer of uncertainty. The scrutiny follows a recent downgrade of Cross Country's stock by Wedbush on May 7, which lowered its rating from Outperform to Neutral. The investigations will question if the board's decision to sell at that price was in the best interest of its shareholders.
The investigation by Wohl & Fruchter adds to the challenges Cross Country has faced in recent months. The company, which reported $1.05 billion in revenue for 2025, has been navigating a shifting market landscape for healthcare staffing firms.
"This transaction highlights how strategically important healthcare staffing firms have become," Crystal Fullilove, senior healthcare staffing analyst at SIA, said in a report on the acquisition. She added that the deal shows investors believe healthcare workforce shortages will be a long-term challenge.
However, the law firms' investigations suggest that not everyone is convinced that the agreed-upon price reflects the company's full value, especially given the long-term tailwinds for the industry. The outcome of these probes could potentially lead to a higher offer for shareholders or a legal challenge to the acquisition.
The proposed acquisition followed a turbulent period for Cross Country. The canceled merger with Aya Healthcare, the nation's largest healthcare staffing firm, was a significant event. At the time, Aya cited shifting market conditions and the lengthy regulatory process as reasons for backing out of the deal.
The subsequent investigations into the Knox Lane deal will now put the board's fiduciary duty under a microscope. Investors will be closely watching for the results of these probes and any potential impact on the acquisition's closing timeline and terms.
This article is for informational purposes only and does not constitute investment advice.
