Encompass Health’s Spin Off Home Health and Hospice Business

Wachtell, Lipton, Rosen & Katz and Bradley Arant Boult Cummings advised Encompass Health on the deal.

Encompass Health Corporation (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, announced its intention to spin off its home health and hospice business to form an independent, publicly traded company. 

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 Wachtell Lipton’s team was led by Partners Igor Kirman (Picture), Sabastian V. Niles, Elina Tetelbaum and Zachary S. Podolsky and included David M. Adlerstein, Counsel, Kyle M. Diamond, Associate, Rebecca K. Rosen, Associate, Jill Barton, Law Clerk (Corporate), Christina C. Ma, Partner, Joseph D. Larson, Of Counsel (Antitrust), Erica E. Bonnett, Partner, Alicia C. McCarthy, Counsel, Brian Diliberto, Associate (Executive Compensation and Benefits), Michael S. Benn, Partner, Rod N. Ghods, Associate, Adriane V. Sanchez, Associate, Morgan A. Arthur, Law Clerk (Finance), T. Eiko Stange, Partner, Swift S.O. Edgar, Associate, and Sarah Perez Berger, Associate (Tax).

Involved fees earner: David Adlerstein – Wachtell, Lipton, Rosen & Katz; Michael Benn – Wachtell, Lipton, Rosen & Katz; Erica Bonnett – Wachtell, Lipton, Rosen & Katz; Kyle Diamond – Wachtell, Lipton, Rosen & Katz; Brian Diliberto – Wachtell, Lipton, Rosen & Katz; Swift Edgar – Wachtell, Lipton, Rosen & Katz; Rod Ghods – Wachtell, Lipton, Rosen & Katz; Igor Kirman – Wachtell, Lipton, Rosen & Katz; Joseph Larson – Wachtell, Lipton, Rosen & Katz; Christina Ma – Wachtell, Lipton, Rosen & Katz; Alicia McCarthy – Wachtell, Lipton, Rosen & Katz; Sabastian Niles – Wachtell, Lipton, Rosen & Katz; Zachary Podolsky – Wachtell, Lipton, Rosen & Katz; Rebecca Rosen – Wachtell, Lipton, Rosen & Katz; Adriane Sanchez – Wachtell, Lipton, Rosen & Katz; Eiko Stange – Wachtell, Lipton, Rosen & Katz; Elina Tetelbaum – Wachtell, Lipton, Rosen & Katz;

Law Firms: Wachtell, Lipton, Rosen & Katz;

Clients: Encompass Health Corporation;