Strategic Merger Set to Revolutionize Healthcare Industry
A New Era of Growth and Synergy
Regional Health Properties and SunLink Health Systems have entered into a definitive merger agreement, paving the way for a combined entity with enhanced financial stability and increased scale. The merger, unanimously approved by both companies’ boards of directors, is subject to shareholder approval, regulatory clearance, and customary closing conditions.
Unlocking Value for Shareholders
Under the terms of the agreement, SunLink shareholders will receive one share of Regional common stock and one share of Series D Preferred Stock for every five SunLink common shares, excluding dissenting shares and those to be cancelled per the merger terms. This transaction is expected to alter the ownership structure, with SunLink shareholders projected to own approximately 43% of the combined entity.
A Stronger Balance Sheet
SunLink reported $17.6m in total assets and was debt-free as of December 31, 2024. The merged company is poised to benefit from Regional’s established skilled nursing and senior living facilities, while SunLink’s complementary pharmacy business and cash-rich balance sheet will provide a significant boost to the combined entity.
Cost Synergies and Operational Efficiencies
Regional anticipates achieving pre-tax cost synergies of around $1m by the end of fiscal 2026, with further operating synergies expected to be realized post-merger. The addition of two industry experts, C. Christian Winkle and Scott Kellman, to the board of the merged company will provide valuable insights and expertise.
Transaction Timeline and Advisors
The completion of the merger is expected in the second quarter of 2025. Harpeth Capital served as the financial advisor, and Troutman Pepper Locke served as the legal advisor to Regional. SunLink engaged Smith, Gambrell & Russell as its legal advisor for the transaction.
A Brighter Future for Shareholders
Regional Health Properties chairman and CEO Brent Morrison emphasized the benefits of the merger, stating, “This transaction will create a combined company with a stronger balance sheet and greater scale.” SunLink chairman and CEO Robert Thornton, Jr., added, “We believe the combination of SunLink with Regional offers the opportunity for increased value to both the SunLink and Regional shareholders.”
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