Genesis HealthCare to Acquire Sun Healthcare Group for $8.50 per Share

Sun Healthcare Group, Inc. SUNH today announced that it has signed a definitive agreement for the acquisition of Sun Healthcare (Sun) by Genesis HealthCare (Genesis). The combined company will be able to strengthen its core business lines and enhance its collective ability to provide the highest quality patient care while meeting the current challenges facing the healthcare industry. Under the terms of the merger agreement, Genesis will acquire Sun for $8.50 per share of common stock in cash, resulting in a transaction value of approximately $275 million net of cash and debt acquired. Sun Healthcare's Board of Directors unanimously approved the transaction. The closing of the transaction is subject to customary conditions, including approval by Sun stockholders, expiration of the waiting period under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976, as well as regulatory approvals. The closing is expected to occur in the fall. The transaction price represents a 43.1% premium over the closing sale price of Sun shares on Tuesday, June 19, 2012 and a 55.6% premium to the volume-weighted average closing sale price of approximately $5.46 during the 30 trading days prior to that date. Regarding the transaction, William A. Mathies, Sun's Chairman and Chief Executive Officer, stated, "The combined entity will have broad geographic reach and the scale necessary to remain competitive in the post-acute sector. On a combined basis, the two companies generated roughly $4 billion in revenue in 2011 and will have more than 420 facilities and 75,000 employees."