In December 2020, Encompass Health Corporation (NYSE: EHC) announced that it was “exploring strategic alternatives” for its home health and hospice segment.
The company doubled down on its preferred option on Wednesday. The Birmingham, Alabama-based company announced it intends to spin off the segment into a new publicly traded company under the name “Enhabit Home Health & Hospice.”
“The Encompass Health Board of Directors believes that the separation of its inpatient rehabilitation business and the [home health and hospice] business into two independent, publicly traded companies will provide significant benefits to both businesses and their stakeholders,” the announcement said.
The spinoff is expected to take place in the first half of this year, subject to various regulatory conditions.
Broadly, Encompass Health believes that a spinoff improves the strategic and operational flexibility of its core business segments while increasing the focus of its different management teams. It will also allow each business to adopt a capital structure and investment policy best suited to its financial profile and needs, according to the company.
Encompass Health shareholders are expected to gain tax-free shares of the new company.
This is a developing story. Please check back later for additional information.
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