Encompass Health’s EXCLUSIVE Home Health Unit Attracts Sources of Interest in Acquisition


March 4 (Reuters) – Private equity firms such as Advent International and companies such as Aveanna Healthcare Holdings Inc (AVAH.O) have expressed interest in acquiring the home healthcare and palliative care businesses of Encompass Health Corp , people familiar with the matter. noted.

Encompass, which provides post-acute healthcare services, said in October it planned to spin off the business, called Enhabit, in the first half of 2022. Last month, the Birmingham-based company, in Alabama, said she was open to separation. a sale or merger.

The sources said Enhabit could be worth up to $3 billion on sale. Aveanna provides pediatric and adult healthcare services, including rehabilitation and palliative care services, and has a market capitalization of $745 million. If he pursued a bid, he would likely need financial backing from major shareholders, including private equity firm Bain Capital.

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Representatives for Encompass, Advent and Aveanna did not return calls and emails seeking comment. A representative for Bain declined to comment.

A shortage of nurses has prompted many players in the US home care industry to try to either step up or step down. The regulatory environment for mergers in this space, however, has been difficult. Aveanna abandoned its $1.2 billion acquisition of Maxim Healthcare in 2020 after the Federal Trade Commission objected to the deal.

Encompass would not need antitrust clearance if it divested Enhabit to its shareholders or sold it to a private equity firm that does not own a competing business.

Last year, hedge fund Jana Partners pushed Encompass, which has a market value of $6.7 billion, to engage with third parties on a potential merger for Enhabit, which offers skilled nursing services, help and home help and occupational therapy.

The hedge fund and other shareholders said combining Enhabit with another industry player would better position the company to handle tougher conditions in the healthcare sector. Encompass said last month it would reduce its board to a maximum of 12 directors after discussions with shareholders including Jana Partners.

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Reporting by Svea Herbst-Bayliss; Editing by Cynthia Osterman

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