SOURCE: Sun Heathcare Group, Inc.

August 29, 2006 16:15 ET

Sun Healthcare Group, Inc. to Sell SunPlus Home Health Services, Inc. and Acquire Preferred Hospice of Oklahoma, Inc.

IRVINE, CA -- (MARKET WIRE) -- August 29, 2006 -- Sun Healthcare Group, Inc. (NASDAQ: SUNH) today announced that it has agreed to sell SunPlus Home Health Services, Inc. to AccentCare Home Health, Inc. for a purchase price of $19.3 million. SunPlus is a subsidiary of Sun that provides skilled home health care, non-skilled home care, as well as home pharmacy services in California and Ohio.

"This transaction is consistent with our focus on fine-tuning our portfolio to operate businesses that further our goal of margin improvement and provide inherent value to our core inpatient business, as is the case with our remaining ancillary business segments," said Richard K. Matros, Sun's chairman and chief executive officer. "This divestiture will close late enough in the year that we do not anticipate any change to our guidance," Matros continued. "I would like to take this time to thank the employees of SunPlus for their valued contribution to Sun HealthCare Group through the most trying of times. I have been associated with many of these employees during the days of Care Enterprises and Regency Health Services when this same segment was part of those companies. They are in good hands with AccentCare," Matros said.

Consummation of the sale is contingent upon regulatory approvals and the satisfaction of a number of other customary legal and business conditions. Sun anticipates closing the transaction in the fourth quarter of 2006.

Sun also announced that it has agreed to purchase Preferred Hospice of Oklahoma, Inc., which operates two hospice programs in Oklahoma, and buy out the management agreement for the management of five hospice programs that are owned by Sun subsidiaries in Oklahoma, Colorado and New Mexico. Upon completion of this transaction, Sun subsidiaries will own and operate seven hospice programs. Consummation of the purchase is contingent upon regulatory approvals and the satisfaction of a number of other customary legal and business conditions. Sun anticipates closing the transaction later this month.

"Buying out the management agreement gives us full control of the hospice offices that had been outsourced, thereby providing greater value to the company. The acquisition of the two offices in Oklahoma consolidates our presence in that state," said Mr. Matros. "While this is a small business for us at this point, it provides a good base for earnings expansion going forward and is consistent, along with the sale of SunPlus, of our stated strategic objectives," Matros said.

About Sun Healthcare Group, Inc.

Sun Healthcare Group, Inc., with executive offices located in Irvine, California, owns SunBridge Healthcare Corporation and other affiliated companies that operate long-term and postacute care facilities in many states. In addition, the Sun Healthcare Group family of companies provides therapy through SunDance Rehabilitation Corporation, medical staffing through CareerStaff Unlimited, Inc. and home care through SunPlus Home Health Services, Inc.

Statements made in this release that are not historical facts are "forward-looking" statements (as defined in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties and are subject to change at any time. These forward-looking statements may include, but are not limited to, statements containing words such as "anticipate," "believe," "plan," "estimate," "expect," "hope," "intend," and similar expressions. Factors that could cause actual results to differ are identified in the public filings made by Sun with the Securities and Exchange Commission and include changes in Medicare and Medicaid reimbursements, including the impact of the Deficit Reduction Act and regulations implementing it; potential liability for losses not covered by, or in excess of, our insurance; the effects of government regulations and investigations; our ability to generate cash flow sufficient to operate our business; our ability to identify, complete and integrate future acquisitions; increasing labor costs and the shortage of qualified healthcare personnel; and loss of key management personnel. More information on factors that could affect our business and financial results are included in our public filings made with the Securities and Exchange Commission, including our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, a copy of which is available on Sun's web site, www.sunh.com.

The forward-looking statements involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond our control. We caution investors that any forward-looking statements made by us are not guarantees of future performance. We disclaim any obligation to update any such factors or to announce publicly the results of any revisions to any of the forward-looking statements to reflect future events or developments.

Any documents filed by Sun with the SEC may be obtained free of charge at the SEC's web site at www.sec.gov. In addition, investors and stockholders of Sun may obtain free copies of the documents filed with the SEC by contacting Sun's investor relations department at (505) 468-2341 (TDD users, please call (505) 468-4458) or by sending a written request to Investor Relations, Sun Healthcare Group, Inc., 101 Sun Avenue N.E., Albuquerque, N.M. 87109. You may also read and copy any reports, statements and other information filed by Sun with the SEC at the SEC public reference room at Room 1580, 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at (800) SEC-0330 or visit the SEC's web site for further information on its public reference room.

Contact Information

  • Contact:
    Investor Inquiries
    (505) 468-2341
    Media Inquiries
    (505) 468-4582