SOURCE: Sun Healthcare Group, Inc.

August 29, 2005 18:43 ET

CareerStaff Unlimited, Subsidiary of Sun Healthcare Group, Inc., Acquires ProCare One Nurses, LLC

IRVINE, CA -- (MARKET WIRE) -- August 29, 2005 -- Sun Healthcare Group, Inc. (NASDAQ: SUNH) today announced the acquisition by CareerStaff Unlimited, Inc., a wholly owned subsidiary of Sun, of ProCare One Nurses, LLC. The purchase price was $8.3 million, of which $4.2 million was paid at closing and $4.1 million is payable over three years pursuant to two promissory notes. ProCare One was profitable in 2004 and had revenues in 2004 of approximately $18.0 million. The acquisition of ProCare One is expected to be accretive to CareerStaff's earnings.

ProCare One Nurses has operating locations in Santa Ana, California, and West Bloomfield, Michigan. ProCare One provides temporary, travel and permanent employment opportunities for nursing professionals. Richard Peranton, president of CareerStaff Unlimited, Inc., said, "This acquisition positions and strengthens CareerStaff in the temporary nurse staffing business arena. CareerStaff already has a strong presence in the therapy and pharmacy temporary business, as well as being a full-service provider for healthcare facilities, permanent placement and physician recruitment needs. The acquisition elevates CareerStaff's competitive position within the healthcare staffing arena. Recruiting and providing highly qualified professionals to healthcare facilities throughout the nation are top priorities for the CareerStaff organization."

CareerStaff offers numerous options for a variety of healthcare professionals and facilities. The acquisition enables CareerStaff to recruit and place additional therapists and nurses for ProCare One's established hospital clients. "This acquisition of a nurse staffing business places CareerStaff in alignment with the company strategic plan for growth by acquisition, as ProCare One is the third acquisition we have made since April of this year," Peranton said.

Sun financed the acquisition by amending its Loan Agreement with CapitalSource Finance LLC to increase Sun's borrowing base.

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., home care through SunPlus Home Health Services, Inc., and medical laboratory and mobile radiology services through SunAlliance Healthcare Services, Inc.

Statements made in this release that are not historical facts, including our estimates regarding financial performance in 2005, 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," "may" and similar expressions. Factors that could cause actual results to differ are identified in the public filings made by the company with the Securities and Exchange Commission and include changes in Medicare and Medicaid reimbursements; 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 integrate the operations of Peak Medical Corporation when that acquisition is completed; increasing labor costs and the shortage of qualified healthcare personnel; and our ability to receive increases in reimbursement rates from government payors to cover increased costs. 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, copies of which are available at 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.

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