United States securities and exchange commission logo
April 28, 2022
Barbera A. Jacobsmeyer
President and Chief Executive Officer
Enhabit, Inc.
6688 N. Central Expressway
Suite 1300
Dallas, TX 75206
Re: Enhabit, Inc.
Draft Registration
Statement on Form 10
Submitted April 4,
2022
CIK No. 0001803737
Dear Ms. Jacobsmeyer:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Draft Registration Statement on Form 10, submitted April 4, 2022
Questions and Answers about the Separation and Distribution, page 14
1. Please revise to
address any material changes in stockholder rights between the existing
Encompass common stock
and the Enhabit common stock. If none, please include a
negative statement to
that effect.
Can Encompass decide to cancel the distribution of Enhabit common stock
even if all of the
conditions have been met?, page 16
2. Please revise this Q&A
to discuss any material consequences to stockholders if
Encompass waives any
conditions and proceeds with the spin-off.
Barbera A. Jacobsmeyer
FirstName LastNameBarbera A. Jacobsmeyer
Enhabit, Inc.
Comapany
April NameEnhabit, Inc.
28, 2022
April 228, 2022 Page 2
Page
FirstName LastName
What are the conditions to the distribution?, page 16
3. We note on page 16 you state that the distribution is subject to "a
number of conditions"
including, "among others," those listed on page 16 and elsewhere.
Please revise so that all
material conditions are listed, and if such conditions are already
listed revise the
disclosure to clearly state that all material conditions are listed.
Risk Factors
Our amended and restated certificate of incorporation and amended and restated
bylaws will
contain..., page 58
4. Please specify, here and on page 161, whether your exclusive forum
provision applies to
Exchange Act claims. Additionally, we note your disclosure that your
"exclusive forum
provision may limit the ability of Enhabit's stockholders to bring a
claim in a judicial
forum that such stockholders find favorable for disputes with Enhabit
or Enhabit's
directors or officers, which may discourage such lawsuits against
Enhabit and Enhabit's
directors and officers." Please include further disclosure noting that
such an exclusive
forum provision could also make it more expensive for investors to
bring a claim against
you.
Cautionary Note Regarding Forward-Looking Statements, page 60
5. We note your disclosure that "neither [you] nor any other person
assumes responsibility
for the accuracy and completeness of any of these forward-looking
statements." You may
not disclaim responsibility for your disclosure. Please revise your
disclosure to remove
any implication that you disclaim responsibility for the disclosures
contained in your
registration statement.
Business
Our Growth Strategy
Pursue Strategic Acquisitions, page 82
6. We note your disclosure that your "track record of successfully
integrating acquired
businesses is demonstrated by the consistent growth in EBITDA of
[y]our acquired
businesses following acquisition." Please reconcile this disclosure
with your disclosure on
page 7 of the information statement, which provides that your success
is "demonstrated by
the consistent growth in adjusted EBITDA." Additionally, please
provide examples of
EBITDA or adjusted EBITDA growth with respect to any recent
acquisitions you have
made in furtherance of this disclosure.
Acquisitions, page 85
7. We note your disclosure that you "anticipate joint ventures will be a
part of [y]our growth
strategy moving forward, as demonstrated by [y]our recent joint
venture announcements
in Boise, Idaho on January 5, 2022 and in Miami, Florida on February
1, 2022." Please
Barbera A. Jacobsmeyer
Enhabit, Inc.
April 28, 2022
Page 3
provide additional details regarding these recent joint venture
announcements, including
the parties you have contracted with and the purpose of the joint
ventures.
Certain Relationships and Related Party Transactions
Relationship with Encompass
Tax Matters Agreement, page 150
8. Please revise to disclose the expected duration of the limitations you
will be subject to as a
result of the Tax Matters Agreement. Please also advise us when you
will obtain the
outside counsel's tax opinion and whether you intend to file the
opinion as an exhibit.
Finally, please quantify the scope of the indemnification obligations
to Encompass or
otherwise supplement your disclosure to provide stockholders with
sufficient information
to assess the materiality of these obligations.
Material U.S. Federal Income Tax Consequences, page 152
9. We note your disclosure that the distribution is "intended to be" tax
free. Please provide
disclosure explaining the facts or circumstances resulting in this
uncertainty and the
degree of uncertainty.
Description of Certain Material Indebtedness, page 156
10. We note your disclosure that, in connection with the separation and
distribution, you
expect to enter into the Credit Facilities. Please disclose the name
or names of the entity
or entities that you will be entering into these agreements with.
Please also file such
agreements or commitment letters as exhibits when and to the extent
available, or advise.
Description of Capital Stock
Exclusive Forum, page 161
11. We note your disclosure regarding your exclusive forum provision. Please
revise to
note that there is uncertainty as to whether a court would enforce such
provision. Please
also revise to state that investors cannot waive compliance with the
federal securities laws
and the rules and regulations thereunder. In that regard, we note that
Section 22 of the
FirstName LastNameBarbera A. Jacobsmeyer
Securities Act creates concurrent jurisdiction for federal and state
courts over all suits
Comapany NameEnhabit,
brought Inc. duty or liability created by the Securities
Act or the rules and
to enforce any
regulations
April 28, 2022 Page thereunder.
3
FirstName LastName
Barbera A. Jacobsmeyer
FirstName LastNameBarbera A. Jacobsmeyer
Enhabit, Inc.
Comapany
April NameEnhabit, Inc.
28, 2022
April 428, 2022 Page 4
Page
FirstName LastName
General
12. Pursuant to Section 12(g)(1) of the Exchange Act, the Form 10 becomes
effective
automatically 60 days after the initial filing date. At that time, you
will be subject to the
reporting requirements of the Exchange Act. In addition, we will
continue to review your
filing until all of our comments have been addressed. If the review
process has not been
completed before the effectiveness date you should consider
withdrawing the Form 10
registration statement to prevent it from becoming effective and, as
applicable, file a new
Form 10 registration at such time as you are able to respond to any
remaining issues or
comments.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Franklin Wyman at 202-551-3660 or Mary Mast at
202-551-3613 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Joshua Gorsky at 202-551-7836 or Margaret Schwartz at 202-551-7153 with
any other
questions.
Sincerely,
Division of
Corporation Finance
Office of Life
Sciences
cc: Zachary S. Podolsky