Enhabit Provides Additional Details on Robust Strategic Review Process

Enhabit, Inc. (NYSE: EHAB) (“Enhabit” or the “Company”) today announced that it has filed its preliminary proxy materials with the Securities and Exchange Commission (the “SEC”) in connection with its upcoming 2024 annual meeting of stockholders (the “2024 Annual Meeting”). The preliminary proxy statement is available on the Investor Relations section of the Enhabit website at investors.ehab.com.

The Company is filing a preliminary proxy statement because AREX Capital Management, LP (together with its affiliates and associates, “AREX”) has notified the Company that it intends to nominate seven candidates for election to the Company’s nine-member board at the 2024 Annual Meeting.

In connection with the filing, Enhabit provided additional information regarding its recently concluded strategic review process. Highlights include:

• Enhabit, with the assistance of its financial advisor, Goldman Sachs, and its legal advisor, Sidley Austin, ran a comprehensive process that lasted approximately nine months. Goldman Sachs received full leeway to engage potential counterparties.
• The process involved 38 potential counterparties, including strategic buyers and financial sponsors. Of those parties, 26 executed non-disclosure agreements and nine participated in management presentations.
• Four parties, consisting of two financial sponsors and two strategic acquirors, provided initial indications of interest.
• The parties expressed varying degrees of interest; however, none submitted formal offers despite the Company’s extensive efforts to facilitate diligence.
• Significant headwinds impacted the strategic review process, including regulatory developments related to changes in Medicare Advantage rates and the antitrust landscape, a difficult healthcare operating environment, and persistently high interest rates.

The Board, which includes two directors appointed as part of a cooperation agreement with Cruiser Capital and Harbour Point Capital, was actively engaged throughout the strategic review process. The Enhabit Board of Directors and management team remain steadfast in their commitment to maximize value for stockholders and will continue to evaluate all opportunities to do so.