Genesis HealthCare Corporation signed a definitive agreement to acquire Sun Healthcare Group, Inc. (NasdaqGS:SUNH) from a group of shareholders for $230 million in cash on June 20, 2012. Genesis HealthCare Corporation will pay $8.50 per share, restricted stock units and restricted shares of Sun Healthcare Group, Inc. The group of shareholders consist of Brigade Capital Management, LLC, Cannell Capital LLC, Nantahala Capital Partners, L.P., BlackRock, Inc. (NYSE:BLK), Columbia Management Investment Advisers, LLC and other shareholders. Genesis financed the transaction using borrowings under a term loan and available cash. Barclays Bank PLC and General Electric Capital Corporation committed financing for the transaction, Barclays Bank PLC being the lead lender. Sun Healthcare Group, Inc. shall continue as an indirect wholly-owned subsidiary of Genesis HealthCare Corporation. In the event of breach of agreement due to Genesis HealthCare Corporation's fault then Genesis HealthCare Corporation shall pay $20 million as termination fee. If the agreement is terminated due to Sun Healthcare Group, Inc.'s fault then Genesis HealthCare Corporation will receive $6.9 million as termination fee.

The closing of the transaction is subject to customary conditions, including approval by Sun Healthcare Group, Inc.'s stockholders, expiration of the waiting period under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976 and regulatory approvals. The Board of Directors of Sun Healthcare Group, Inc. has unanimously approved the deal. The Board of Directors of Genesis approved the transaction. The closing is expected to occur in the fall of 2012. As of August 9, 2012, Sun Healthcare Group, Inc. announced the expiration of waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 on August 8, 2012. The special meeting of Sun's stockholders to approve the transaction will be held on September 5, 2012. As on September 5, 2012, the transaction was approved by the shareholders of Sun Healthcare. The shareholders also approved, on an advisory basis, the compensation arrangements that may be paid or become payable to Sun's named executive officers in connection with the transaction. As of October 3, 2012, the West Virginia Health Care Authority approved the deal.

Thomas H. Kennedy, Jeremy D. London, Neil Rock, John Rayis and Steven Messina of Skadden, Arps, Slate, Meagher & Flom L.L.P. acted as legal advisors for Genesis HealthCare Corporation. Steven J. Tonsfeldt, Andor D. Terner, Tom Baxter, Jeff Walbridge, Robert Rizzi, Adam Karr, Andrew Dolak and David Beddow of O'Melveny & Myers, LLP acted as legal advisors for Sun Healthcare Group, Inc. MTS Securities, LLC acted as financial advisor and fairness opinion provider for Sun Healthcare Group, Inc. Marcus Ricciani, Scott Schaevitz, Jed Brody and Eric Rabinowitz of Barclays Capital Inc. acted as financial advisors to Genesis HealthCare Corporation. Arnall Golden Gregory, LLP and Williams Mullen acted as legal advisors for Genesis HealthCare Corporation. Innisfree M&A Incorporated acted as information agent to Sun for an estimated fee of $15,000. As compensation for MTS' financial advisory services, upon the completion of the merger, Sun will pay M&A success fee of $7,037,440. American Stock Transfer & Trust Company acted as transfer agent to Sun. William Haubert of Richards, Layton & Finger, P.A. acted as legal advisor for Sun Healthcare.

Genesis HealthCare Corporation completed the acquisition of Sun Healthcare Group, Inc. (NasdaqGS:SUNH) from a group of shareholders on December 3, 2012. As a result of the transaction, Sun Healthcare will be delisted from Nasdaq Stock Market and all members of the CoSun Healthcare's Board of Directors resigned from their positions. As a result following new officers ere appointed- George V. Hager, Jr. as Chief Executive Officer, Robert A. Reitz as Executive Vice President and Chief Operating Officer, and Thomas DiVittorio as Chief Financial Officer and Treasurer.