Encompass Health Sells Home Health & Hospice for $2.6B

TL;DR

Encompass Health just sold its Home Health & Hospice division for $2.6B to private equity. Big strategic move!

AI Summary

Encompass Health Corporation announced on March 11, 2024, that it has completed the sale of its Home Health and Hospice business to a consortium of private equity firms led by CD&R, Welsh Carson, and Generation Investment Management. The transaction, initially announced in October 2023, is expected to generate approximately $2.6 billion in gross proceeds for Encompass Health.

Why It Matters

This significant divestiture marks a strategic shift for Encompass Health, allowing it to focus on its inpatient rehabilitation business and potentially unlock shareholder value.

Risk Assessment

Risk Level: medium — The sale of a major business segment introduces integration risks and potential impacts on future revenue streams and market position.

Key Numbers

• $2.6B — Gross Proceeds (Amount received by Encompass Health from the sale of its Home Health and Hospice business.)

Key Players & Entities

• Encompass Health Corporation (company) — Seller
• CD&R (company) — Buyer Consortium Member
• Welsh Carson (company) — Buyer Consortium Member
• Generation Investment Management (company) — Buyer Consortium Member
• $2.6 billion (dollar_amount) — Gross proceeds from sale
• March 11, 2024 (date) — Closing date of sale
• October 2023 (date) — Date of initial announcement

FAQ

Key Financial Figures

• $0.01 — ich registered Common Stock, par value $0.01 per share EHC New York Stock Exchange
• $5,200 million — 2024 ranges: Net operating revenue of $5,200 million to $5,300 million; Adjusted EBITDA of
• $5,300 million — operating revenue of $5,200 million to $5,300 million; Adjusted EBITDA of $1,015 million to
• $1,015 million — to $5,300 million; Adjusted EBITDA of $1,015 million to $1,055 million; and Adjusted earnin
• $1,055 million — ; Adjusted EBITDA of $1,015 million to $1,055 million; and Adjusted earnings per share from
• $3.77 — ons attributable to Encompass Health of $3.77 to $4.06. The information contained he
• $4.06 — butable to Encompass Health of $3.77 to $4.06. The information contained herein is b
• $140 million — debt discounts and fees - approximately $140 million to $150 million Amortization of debt-r
• $150 million — nd fees - approximately $140 million to $150 million Amortization of debt-related items - a
• $10 million — n of debt-related items - approximately $10 million Forward-Looking Statements Statement

Filing Documents

• ehc-20240311.htm (8-K) — 32KB
• 0000785161-24-000015.txt ( ) — 158KB
• ehc-20240311.xsd (EX-101.SCH) — 2KB
• ehc-20240311_lab.xml (EX-101.LAB) — 21KB
• ehc-20240311_pre.xml (EX-101.PRE) — 12KB
• ehc-20240311_htm.xml (XML) — 3KB

01. Regulation FD Disclosure

ITEM 7.01. Regulation FD Disclosure. Encompass Health Corporation (the "Company" or "Encompass Health") will participate in the Barclays Global Healthcare Conference in Miami, Florida on March 12-14, 2024. Encompass Health's President and Chief Executive Officer Mark Tarr and Executive Vice President and Chief Financial Officer Doug Coltharp will participate in a fireside chat on Tuesday, March 12, 2024, from 8:30 – 8:55 a.m. ET. The fireside chat will be webcast live and will be available at http://investor.encompasshealth.com by clicking on an available link. The Company reiterates as of the date hereof its guidance previously reported in the Current Report on Form 8-K, dated February 7, 2024 and during the Company's earnings conference call held on February 8, 2024. Accordingly, the Company continues to expect the following full-year 2024 ranges: Net operating revenue of $5,200 million to $5,300 million; Adjusted EBITDA of $1,015 million to $1,055 million; and Adjusted earnings per share from continuing operations attributable to Encompass Health of $3.77 to $4.06. The information contained herein is being furnished pursuant to Item 7.01 of Form 8-K, "Regulation FD Disclosure." This information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. The furnishing of this information will not be deemed an admission as to the materiality of any information contained herein. Note Regarding Presentation of Non-GAAP Financial Measures Excluding net operating revenues, the Company does not provide guidance on a GAAP basis because it is unable to predict, with reasonable certainty, the future impact of items that are deemed to be outside the control of the Company or otherwise not indicative of its ongoin

Forward-Looking Statements

Forward-Looking Statements

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. ENCOMPASS HEALTH CORPORATION By: / S / D OUGLAS E. C OLTHARP Name: Douglas E. Coltharp Title: Executive Vice President and Chief Financial Officer Dated: March 11, 2024

View Full Filing

View this 8-K filing on SEC EDGAR