Encompass Health Corp. (NYSE: EHC) announced Tuesday it is “exploring strategic alternatives” for its home health and hospice business, which brought in total segment revenue of $274.5 million in the third quarter of 2020 and $1.09 billion in all of 2019, according to company financial filings.
The Birmingham, Alabama-based Encompass Health currently ranks as the fourth-largest home health provider in the nation, LexisNexis data suggests. Overall, its U.S. footprint includes 242 home health locations and 83 hospice locations.
“Since joining together with Encompass Home Health and Hospice in 2015, we have generated substantial growth in both our business segments, and we continue to deliver high-quality, cost-effective, integrated care to a growing number of our patients,” President and CEO Mark Tarr said in a statement.
The company is considering “a range of options” for its home health and hospice business, including a full or partial separation from Encompass Health through an initial public offering, spin-off, merger, sale or other transaction.
Tuesday’s news has apparently been in the works for a while, as Encompass Health’s board of directors has been evaluating an array of alternative strategies and structures for some time. The board has elected to make an official announcement as it proceeds with a more formalized process, the company noted.
No timetable has been established for the completion of the strategic review. Encompass Health does not intend to disclose further developments with respect to its strategic review process.
“Our primary focus this year has been to ensure Encompass Health’s best possible response to this unprecedented global pandemic,” Lee Higdon, chairman of the company’s board of directors, said. “This notwithstanding, the U.S. health care delivery system continues to change, and we believe the time is appropriate for us to further reassess the corporate structure that may optimize the strategic positioning and growth of our businesses.”
This is a developing story. Please check back later for further updates.
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