Irvine-based nursing home operator Sun Healthcare Group Inc. said Monday it agreed to acquire New Mexico’s Peak Medical Corp. in a stock deal worth $150 million.
Sun Healthcare, which runs nursing homes, assisted-living facilities and rehabilitation centers across the country, has agreed to exchange 9 million shares for all of Peak’s outstanding stock. Sun also is set to assume $96 million of Peak debt.
Albuquerque-based Peak operates 62 facilities that include skilled nursing facilities, independent and assisted living residences and a small hospice operation.
Shares of Sun Healthcare closed up about 5% on Monday. The company said that it expects the transaction to add to earnings after the deal closes sometime in the second half.
For the 12 months ended March 31, Peak had unaudited revenues of about $225 million and earnings before taxes of roughly $29 million.
“Sun’s acquisition of Peak creates an outstanding strategic combination that builds on our core strengths, leverages our organizational infrastructure and complements our eographic footprint,” said Richard K. Matros, Sun’s chief executive, in a statement.
Sun said it continues to expect its own 2005 revenue to be $870 million to $880 million. Income before taxes is seen coming in at $55 million to $57 million. The company expects to update its outlook after the acquisition is completed.
In 1999, Sun Healthcare filed for bankruptcy reorganization after years of rapid growth, acquisitions and an industry downturn.
