Sun Healthcare Group Inc., an Irvine-based operator of nursing homes and other health businesses, said Monday it plans to split in two, with its real estate operations and its operating subsidiaries becoming two publicly traded companies.
Sun’s operating group will continue to provide skilled nursing care, rehabilitation and other specialty healthcare services and retain the Sun Healthcare Group name.
In a release, Sun said that the new Sun would be able to pursue the same growth strategies that it currently does, but with significantly less debt.
The second company is set to own all of Sun’s currently owned real estate under the name Sabra Health Care REIT Inc.
Sun said the split would allow Sabra to realize the full value of its real estate holdings.
Sun said in a release that it would separate the companies through distributing common stock of the operating company to its current shareholders. The deal is expected to be completed in this year’s fourth quarter.
The company said it would raise more money through a common stock offering prior to the split.
Richard Matros, Sun’s chief executive, is set to become chief executive of Sabra after the spinoff.
William Mathies, now president of subsidiary SunBridge Healthcare Corp. and chief operating officer of Sun’s operating subsidiaries, will become chief executive of the operating company after the split.