IRVINE, Calif., June 20, 2012 (GLOBE NEWSWIRE) -- Sabra Health Care REIT, Inc.'s ("Sabra," the "Company" or "we") (Nasdaq:SBRA) largest tenant, Sun Healthcare Group, Inc. ("Sun"), announced today that it has signed a definitive agreement to be acquired by Genesis Healthcare ("Genesis"). According to Sun's announcement, Genesis will acquire Sun for $8.50 of cash per share of common stock, resulting in a transaction value of approximately $275 million net of cash and debt acquired.
Sun's Board of Directors unanimously approved the transaction. According to Sun's announcement, the closing of the transaction is subject to customary conditions, including approval by Sun stockholders, expiration of the waiting period under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976, as well as regulatory approvals, and the closing is expected to occur in the fall.
Commenting on the proposed merger, Rick Matros, CEO and Chairman, said, "We view the proposed acquisition of Sun by Genesis as a positive. Given the size of Genesis and its overall financial strength, we believe that the credit profile of our tenant base is improved. I have known George Hager, Genesis' CEO, for years and have great respect for him and his management team. We look forward to working with the management teams of Sun and Genesis on this transition."
Regarding the enhanced credit profile of Sabra's tenant base, Matros also added, "We expect to obtain a parent guaranty from Genesis to replace the existing Sun guaranty. Additionally, we expect the guaranty to include a tangible net worth covenant and expect to obtain an amendment to our master lease agreement with Sun to improve the annual rent escalators to a fixed 2.5% increase and to include cross-default provisions with Genesis' term loan, all of which should improve the overall quality of our leases."
Sabra Health Care REIT, Inc. (Nasdaq:SBRA), a Maryland corporation, is a self-administered, self-managed real estate investment trust (a "REIT") that, through its subsidiaries, owns and invests in real estate serving the healthcare industry. Sabra leases properties to tenants and operators throughout the United States. As of June 1, 2012, Sabra's investment portfolio included 103 properties (consisting of (i) 93 skilled nursing/post-acute facilities, (ii) nine senior housing facilities, and (iii) one acute care hospital) and one mezzanine loan investment. As of June 1, 2012, Sabra's properties were located in 25 states and included 11,444 licensed beds.
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FORWARD-LOOKING STATEMENTS SAFE HARBOR
This release contains "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995. These statements may be identified, without limitation, by the use of "expects," "believes," "intends," "should" or comparable terms or the negative thereof. Forward-looking statements in this release include all statements regarding our expectations regarding the proposed acquisition of Sun by Genesis, including with respect to the anticipated modifications to our master lease agreement with Sun and with respect to expectations regarding a replacement guaranty from Genesis.
Our actual results may differ materially from those projected or contemplated by our forward-looking statements as a result of various factors, including, among others, the following: risks relating to the ability of Sun and Genesis to satisfy the conditions to the transaction; risks that the businesses will not be integrated successfully; risks that any cost savings and other synergies from the transaction that may be anticipated by Sun and Genesis may not be fully realized or may take longer to realize than expected; disruption from the transaction making it more difficult for Sun to maintain relationships with customers, employees or suppliers; and other factors discussed from time to time in our news releases, public statements and/or filings with the Securities and Exchange Commission (the "SEC"), especially the "Risk Factors" sections of our Annual and Quarterly Reports on Forms 10-K and 10-Q. We assume no, and hereby disclaim any, obligation to update any of the foregoing or any other forward-looking statements as a result of new information or new or future developments, except as otherwise required by law.
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