Benzinga | Jan 19, 2022 04:17PM EST

Encompass Health Corporation Announces Plan To Spin Off Home Health And Hospice Business Under New Brand Enhabit Home Health & Hospice

Encompass Health Corporation ("Encompass Health" or the "Company") (NYSE:EHC), a national leader in integrated healthcare, offering facility-based and home-based patient care through its network of inpatient rehabilitation hospitals and home health and hospice agencies, today announced its intention to spin off its home health and hospice business to form an independent, publicly traded company (the "HH&H Business") and to rebrand the HH&H Business as Enhabit Home Health & Hospice.

The Encompass Health Board of Directors believes that the separation of its inpatient rehabilitation business and the HH&H Business into two independent, publicly traded companies will provide significant benefits to both businesses and their stakeholders, including improving the strategic and operational flexibility of each business, increasing the focus of each management team on its business strategy and operations, allowing each business to adopt a capital structure and investment policy best suited to its financial profile and business needs, and providing each company with its own equity currency to facilitate acquisitions and to better incentivize management.

The spin-off, which is expected to be tax-free to Encompass Health's shareholders, will result in Encompass Health's shareholders owning stock in both companies. The Company intends to consummate the spin-off in the first half of 2022, subject to various conditions, including the effectiveness of a Form 10 registration statement, regulatory approvals and receipt of a favorable IRS private letter ruling.

The establishment of Enhabit Home Health & Hospice will further strengthen Enhabit's focus on high-quality, cost-effective care delivered in the home setting. Enhabit Home Health & Hospice chose the name Enhabit because it intuitively is linked to the home. Drawn from the word "inhabit," the name evokes a sense of comfort and well-being with that promise enlivened by the quality of care Enhabit's clinicians bring to every patient's home. The "en" of Enhabit connects the company to its Encompass legacy, signaling to patients that they can expect the same level of excellence and compassion that they received from Encompass Health. The rebranding is expected to begin in mid-April 2022 and to be largely completed by the consummation of the spin-off.

Citigroup Global Markets Inc. and Goldman Sachs & Co. LLC are acting as financial advisors and Wachtell, Lipton, Rosen & Katz and Bradley Arant Boult Cummings LLP are serving as legal advisors to Encompass Health.