Regional Health Properties and SunLink Health Systems have announced a definitive merger agreement, under which the latter will merge with Regional.

The merger, which has been unanimously approved by the boards of directors of both companies, is subject to approval by the shareholders of both Regional and SunLink, regulatory approvals and satisfaction of customary closing conditions.

Regional Health Properties President and CEO Brent Morrison said, “This merger will create a combined company with a stronger balance sheet and greater scale.”

As part of the deal, SunLink shareholders will receive one share of Regional common stock and one share of Series D preferred stock for every five shares of SunLink common stock, excluding dissenting and outstanding shares cancel under the terms of the merger.

The transaction is poised to alter the ownership structure, with SunLink shareholders projected to own approximately 43% of the combined entity.

SunLink reported $17.6 million in total assets and was free of long-term debt as of December 31, 2024.

Regional expects to achieve pre-tax cost synergies of approximately $1 million by the end of fiscal year 2026 and expects that further operating synergies may be realized following the merger.

The board of the merged company will be strengthened by the addition of two industry experts, C. Christian Winkle and Scott Kellman.

The merger is expected to be completed during the second quarter of 2025.

Harpeth Capital is acting as financial advisor and Troutman Pepper Locke is Regional’s legal advisor.

SunLink has engaged Smith, Gambrell & Russell as legal counsel for the transaction.

SunLink President and CEO Robert Thornton, Jr. said, “SunLink has been looking for a merger partner that would benefit from our complementary pharmacy, cash and balance sheet business that is debt-free.

“We believe the combination of SunLink with Regional, whose assets consist of established senior and skilled nursing facilities, provides an opportunity to increase value for both SunLink and Regional stockholders” .

“Regional Health Properties and SunLink Health Systems sign merger agreement” was originally created and published by Hospital Managementa trademark owned by GlobalData.

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