Odyssey Healthcare

Case Solution

Robert F. Higgins, Virginia A. Fuller, Umer Raffat
Harvard Business School ()

In January 2001, Odyssey Healthcare CEO Dick Burnham and Odyssey’s board of directors considered selling the hospice business to a major provider or going public (IPO). With 38 hospice locations in 21 states, Odyssey has cared for the terminally ill since opening its first location in 1996. Since then, the company has grown rapidly through a series of acquisitions, the development of new hospice locations, and a organic growth. Odyssey had just had its first profitable year in 2000 with a net income of $ 3.1 million and was still a relatively young company. In addition, the hospice industry was subject to extensive federal, state, and municipal regulations on the remuneration of hospice services and the implementation of operations. Burnham wasn’t sure how the market would react to a company with sources of income so reliant on the government. Furthermore, the recent collapse of the dot-com boom in 2000 could make an IPO impossible under prevailing market conditions. However, on the bright side, healthcare companies were generally viewed as recession-proof and could therefore be a solid investment in the event of an economic downturn. Burnham had to decide if it was the right time to leave and, if so, what would be the best time to leave.

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