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US - Sun to Be Acquired in $275 Million Deal

June 21 2012

Sun Healthcare Group Inc. (NASD: SUNH), a provider of healthcare staffing, signed a deal to be acquired by Genesis HealthCare LLC for $8.50 per share. The deal has a transaction value of approximately $275 million net of cash and debt acquired.

Irvine, Calif.-based Sun provides healthcare staffing through its CareerStaff Unlimited Inc. division, which ranked No. 11 last year's list of largest U.S. healthcare staffing firms by Staffing Industry Analysts.

Sun reported healthcare staffing revenue of $89.4 million in 2011, according to a filing with the U.S. Securities and Exchange Commission. However, Sun’s healthcare staffing operations provided only about 4.5 percent of total company revenue that year. Sun provides other healthcare services including skilled nursing, therapy services and hospice services. Sun’s total revenue was $1.93 billion in 2011.

Sun’s directors unanimously approved the Genesis deal, but shareholders must still OK the plan. The acquisition is set to close in the fall.

The deal will take Sun private.

“The combined entity will have broad geographic reach and the scale necessary to remain competitive in the post-acute sector,” said Sun Chairman and CEO William Mathies. “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.”

Sun reported that most of its 28,000 employees would remain with Genesis after the deal, according to an SEC filing. The company said it expects minimal disruption for its front-line caregivers at its CareerStaff division.

Genesis, based in Kennett Square, Pa., is a skilled nursing care provider with more than 48,000 employees and 231 skilled nursing centers and assisted living residences in 13 eastern states, according to a filing with the SEC. Genesis also supplies rehabilitation therapy to more than 1,100 healthcare providers in 35 states and the District of Columbia.

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