Enhabit Inc. (NYSE: EHAB) has accomplished its strategic evaluate, which was first introduced final August. In the end, the corporate's board of administrators determined to not pursue a sale or merger right now, however will as an alternative stay an impartial publicly traded firm.

The house well being and hospice big spun off from Embody Well being (NYSE: EHC) in July 2022. As a result of workforce pressures and Medicare Benefit (MA) penetration, efficiency faltered throughout its first 12 months within the public market, in the end leading to a strategic evaluate. Enhabit's inventory value was $25 per share when it first went public, and has since fallen beneath $10 per share as of Wednesday afternoon.

Enhabit's board thought-about a sale, merger or different transaction, however unanimously determined that the corporate ought to proceed on its present path by itself.

“We consider that macroeconomic headwinds, together with, amongst different issues, unsure regulatory developments together with Medicare reimbursement insurance policies throughout the healthcare business and an evolving antitrust panorama, a troublesome healthcare working atmosphere and persistently excessive rates of interest, will in the end restrict the alternatives for a transaction that might enhance well being care. shareholder worth,” mentioned Leo Higdon, chairman of the Enhabit board, in a press release. “Given this, and different strategic alternate options mentioned with advisors in the course of the evaluate course of, the Board has decided that the easiest way to boost shareholder worth right now is to proceed to function as a standalone firm.”

Enhabit, primarily based in Dallas, has 255 dwelling care places and 112 hospice places throughout 34 states.

The corporate entered into non-disclosure agreements with a “massive variety of counterparties” and obtained curiosity from a “selection” of potential buyers. However in keeping with the press launch, no formal proposals have been made.

“Now that the strategic alternate options evaluate course of has been accomplished, the administration workforce is targeted on working Enhabit's core companies,” Barb Jacobsmeyer, president and CEO of Enhabit, mentioned in a press release. “Our momentum exiting 2023 and the primary quarter of 2024, as we employed extra main care physicians, negotiated extra and higher dwelling well being payer contracts, and managed normal and administrative prices, is creating pleasure in our technique and our workforce, and we’re assured that we’re taking the fitting steps to drive future progress and improve shareholder worth.”

The strategic evaluate course of was initially inspired by an activist investor, New York-based hedge fund AREX Capital Administration.

In October, it wrote in an open letter {that a} sale was the “solely acceptable consequence” of the strategic evaluate course of.

“We strongly emphasize to the board that there must be completely little question that the very best bid obtained in a full and truthful public sale is the truthful worth of Enhabit,” AREX Capital wrote on the time. “A sale of the corporate is the one acceptable consequence to this course of.”

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