TOLEDO, Ohio--(BUSINESS WIRE)--
Health Care REIT, Inc. (HCN) announced today that its largest tenant, Genesis HealthCare, has entered into an agreement to purchase Sun Healthcare Group (NASDAQ GS: SUNH) in a $300 million transaction. The combination of Genesis HealthCare and Sun Healthcare Group will create the largest provider of post-acute and skilled nursing services in the country with over 420 facilities located in 29 states. On a combined basis, the two companies generated approximately $4.0 billion in revenue in 2011.
“The transaction provides George Hager and his team the opportunity to expand the Genesis portfolio and to increase the scale of its rehabilitation therapy, hospice and inpatient services,” commented George L. Chapman, Chairman and Chief Executive Officer of Health Care REIT, Inc. “We expect the transaction to have a positive impact on the financial strength of Genesis, further enhancing our investment.”
Genesis' corporate fixed charge coverage is expected to remain unchanged as a result of the transaction, with the opportunity for improvement when operational efficiencies are achieved. The eighteen facilities currently leased by Health Care REIT to Sun will be added to the master lease with Genesis, generating a nominal improvement in facility level payment coverage of the Genesis lease.
The transaction has been approved by Genesis’ and Sun’s Boards of Directors. The transaction is subject to customary closing conditions, including Sun Healthcare Group stockholder approval, regulatory approval and expiration of the waiting period under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976. The transaction is expected to close in the second half of 2012.
About Health Care REIT, Inc.
Health Care REIT, Inc., an S&P 500 company with headquarters in Toledo, Ohio, is a real estate investment trust that invests across the full spectrum of seniors housing and health care real estate. The company also provides an extensive array of property management and development services. As of March 31, 2012, the company’s broadly diversified portfolio consisted of 956 properties in 46 states. More information is available on the company's website at www.hcreit.com.
Forward-Looking Statements and Risk Factors
This document may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. When the company uses words such as may, will, intend, should, believe, expect, anticipate, project, estimate or similar expressions, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties. The company’s expected results may not be achieved, and actual results may differ materially from expectations. This may be a result of various factors, including Sun stockholder approval, regulatory approval and expiration of the HSR waiting period; the parties performance of their obligations under the transaction agreements; competition within the health care and seniors housing industries; unanticipated difficulties and/or expenditures relating to the transaction; and Genesis’ ability to realize operating efficiencies. Additional factors are discussed in the company’s Annual Report on Form 10-K and in its other reports filed from time to time with the Securities and Exchange Commission. The company assumes no obligation to update or revise any forward-looking statements or to update the reasons why actual results could differ from those projected in any forward-looking statements.