GE Capital, Healthcare Financial Services, an operating unit of General Electric Company (GE - Analyst Report), has recently facilitated the acquisition of the Sun Healthcare Group Inc. by Genesis HealthCare. The company acted as an administrative agent on an asset-based revolving credit facility worth $400 million, and as a syndication agent on a $325 million cash flow term loan credit facility, both of which were utilized to fund the acquisition.
Kennett Square, Pennsylvania based Genesis is one of the largest skilled nursing and rehabilitation therapy providers in the U.S. With about 80,000 employees, the company has over 400 Skilled Nursing Centers and Assisted/Senior Living Communities in 29 states, while its Genesis Rehab Services division provides therapy services to over 1,500 health care providers in 46 states.
On the other hand, Sun Healthcare provides long-term, sub-acute, and related health care services primarily to the senior population. Based in Irvine, California, the company has 190 managed inpatient facilities in 23 states. The company mostly operates skilled nursing centers for seniors, besides offering assisted and independent living facilities and behavioral health services.
With the acquisition, Genesis has become a behemoth of sorts in the skilled nursing segment of the healthcare industry with 422 skilled nursing centers in 29 states. At the same time, the strategic purchase has extended its presence in the rehabilitation therapy business to over 1,500 contracts in 46 states. Besides expanding its geographic footprint, the acquisition is also expected to result in operational synergies and improve the efficiency with combined annual revenue of approximately $4.6 billion and employee strength of nearly 80,000.
General Electric is one of the largest and the most diversified technology and financial services corporations in the world. With products and services ranging from aircraft engines, power generation, water processing, and security technology to medical imaging, business and consumer financing, media content and industrial products, it serves customers in more than 100 countries and employs more than 287,000 people worldwide.
Its segments include Energy Infrastructure, Aviation, Healthcare, Transportation, Home & Business Solutions and GE Capital, Healthcare Financial Services. With more than $60 billion in financing over ten years to various companies in the healthcare sector, GE Capital, Healthcare Financial Services has an in-depth industry know-how and expertise.
General Electric currently has a Zacks #4 Rank (Sell). We have a long-term Neutral recommendation on the stock. We also have a Neutral recommendation and a Zacks #3 Rank (Hold) for 3M Company (MMM - Analyst Report), one of the peers of General Electric.