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Hill-Rom and Encompass Group Form Joint Venture

BATESVILLE, Ind. and MCDONOUGH, Ga., Nov. 9 /PRNewswire-FirstCall/ -- Hill-Rom (NYSE: HRC) and Encompass Group today announced the formation of a joint venture that will focus on the sale and distribution of a comprehensive range of surface replacement systems that are intended to be sold separate from a bed frame and as replacements for surfaces that are technologically obsolete or at the end of their useful life. Hill-Rom, a global leader in patient support systems and related technologies, brings its 80 years of expertise and innovation in the areas of therapeutic and prevention surfaces together with Encompass, a recognized leader in health care textiles and therapeutic and prevention surfaces, to form a new jointly-owned company, Encompass TSS, LLC.

"Encompass and Hill-Rom today both participate in the rapidly growing surface replacement business, each with a separate product portfolio. The Centers for Medicare and Medicaid Services (CMS) 'no payment rules' for hospital acquired pressure ulcers and the rising acuity levels of patients, are driving significant category expansion," explained Mike Grippo, vice president of Corporate Development and Strategy at Hill-Rom. "This combination will offer our hospital customers the most comprehensive and advanced portfolio of stand-alone replacement surfaces in the industry, while fielding the largest national sales force exclusively dedicated to this category."

He continued, "We believe that the combination of Hill-Rom's strengths in therapy surface innovation and Encompass' highly regarded family of AccuMax® and MaxiFloat® surfaces and focused direct sales channel will enable us to accomplish that category expansion goal. This joint venture also will free Hill-Rom's sales and clinical consulting organization to focus on their large portfolio of patient support systems, patient environment, and health IT products sold as original equipment or rented."

Encompass Group, through its ETSS business unit, has traditionally been focused on meeting the needs of customers who desire high quality and affordable surface replacement systems. Hill-Rom's traditional focus on patient support systems, with a significant emphasis on advanced therapeutic surfaces, has resulted in key innovations in pressure reduction and redistribution, micro-climate management, antimicrobial protection, and the integration of surfaces with the bed frame. This joint venture will combine a single-minded focus on customer replacement surfaces with industry leading platforms carrying the AccuMax®, MaxiFloat®, Hill-Rom® and Tempur-Pedic® brands.

Encompass TSS will become the exclusive distributor of all but the most complex of Hill-Rom's capital surfaces in the after-market replacement segment in North America Acute Care. It is also expected that the joint venture will serve as the primary distribution channel for surface replacement products that Hill-Rom develops in the future. Encompass TSS will remain in place as a key supplier for Hill-Rom for non-powered and powered air support surfaces that are sold in combination with a new bed frame. The new company will continue to operate with headquarters at its current location in Pasadena, California, and the sales force will be expanded.

"This joint venture establishes a new company with the product breadth, channel depth, and intense customer focus needed to provide unparalleled performance for our customers," said Mike Spurlock, chief executive officer of Encompass Group. "We see this as a win for both companies and for all of our customers."

The new company was formed on November 9, 2009 and includes all the assets of Encompass Therapeutic Support Systems (ETSS), a division of Encompass. It will be held jointly with 60 percent owned by Hill-Rom and 40 percent owned by Encompass.


Encompass Group is one of the leading manufacturers and marketers of reusable textiles, professional apparel, therapeutic support surfaces and disposable and single use medical products. A privately owned company, Encompass Group is composed of five interdependent operating divisions, each focused on meeting specific customer, product or market needs.


Hill-Rom is a leading worldwide manufacturer and provider of medical technologies and related services for the health care industry, including patient support systems, safe mobility and handling solutions, non-invasive therapeutic products for a variety of acute and chronic medical conditions, medical equipment rentals, and information technology solutions. Hill-Rom's comprehensive product and service offerings are used by health care providers across the health care continuum in hospitals, extended care facilities and home care settings to enhance the safety and quality of patient care.

Hill-Rom...enhancing outcomes for patients and their caregivers.

Disclosure Regarding Forward-Looking Statements

Certain statements in this press release contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, regarding the Company's future plans, objectives, beliefs, expectations, representations and projections. The Company has tried, wherever possible, to identify these forward-looking statements using words such as "intend," "anticipate," "believe," "plan," "encourage," "expect," "may," "goal," "become," "pursue," "estimate," "strategy," "will," "project," "forecast," "continue," "accelerate," "promise," "increase," "higher," "lower," "reduce," "improve," "expand," "progress," "potential" or the negative of those terms or other variations of them or by comparable terminology. The absence of such terms, however, does not mean that the statement is not forward-looking. It is important to note that forward-looking statements are not guarantees of future performance, and the Company's actual results could differ materially from those set forth in any forward-looking statements. Factors that could cause actual results to differ from forward-looking statements include but are not limited to: the Company's dependence on its relationships with several large group purchasing organizations, whether the Company's new products are successful in the marketplace, changes in customers' Medicare reimbursements, collections of accounts receivable, compliance with FDA regulations, antitrust litigation, potential exposure to product liability or other claims, failure of the Company's announced or future strategic initiatives and restructuring and realignment activities to achieve expected growth, efficiencies or cost reductions, disruptions in the Company's business or other adverse consequences resulting from the recent spin-off of the funeral service business, failure to realize the anticipated benefits of the spin-off, failure of the Company to execute its acquisition and business alliance strategy through the consummation and successful integration of acquisitions or entry into joint ventures or other business alliances, increased costs or unavailability of raw materials, adverse changes in global economic conditions or disruptions of credit markets, labor disruptions, the ability to retain executive officers and other key personnel, and certain tax-related matters. For a more in depth discussion of these and other factors that could cause actual results to differ from those contained in forward-looking statements, see the discussions under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the period ended September 30, 2008 and the Quarterly Report on Form 10-Q for the quarter ended June 30, 2009. The Company assumes no obligation to update or revise any forward-looking statements.


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