Genesis Closes $215 Million Acquisition of Sun Healthcare

Genesis HealthCare announced it has completed the acquisition of Sun Healthcare Group Inc. for $215 million.

Per the agreement, Genesis acquired Sun for $8.50 per share of common stock in cash and financed the the transaction using borrowings under a term loan and available cash.

The new company will have nearly 80,000 employees and combined annual revenue of approximately $4.6 billion. The Genesis HealthCare headquarters will remain in Kennett Square, Pennsylvania.


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 65,000 employees.”

“This transaction brings together two companies with similar operating structures, experienced and deep management teams, and cultures committed to quality patient care,” said William A. Mathies, Sun’s Chairman and Chief Executive Officer. “Like Sun, Genesis operates a predominantly leased portfolio of skilled nursing and assisted living facilities as well as a fully integrated rehabilitation company. Together, the combined company will be able to use its strengths on a broader scale, which will be advantageous as the post-acute care industry continues to evolve.”

Simultaneous with the Genesis / Sun merger, Sun’s SolAmor Hospice segment was sold to Life Choice Hospice, a provider of in-home hospice care, for approximately $85 million.  Net cash sale proceeds of $75 million were used to repay Genesis senior indebtedness.  Genesis owns an approximate one-third interest in Life Choice Hospice.


Written by John Yedinak

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