Sun Healthcare

     Irvine, Calif. (April 19, 2007) - Sun Healthcare Group, Inc. (NASDAQ GM: SUNH) announced that it completed its previously announced acquisition of Harborside Healthcare Corporation on April 19, 2007. Harborside is a privately held healthcare company based in Boston, Massachusetts that operates 73 skilled nursing facilities, one assisted living facility and one independent living facility with approximately 9,000 licensed beds in 10 states.
     Sun paid $349.4 million in cash for the equity of Harborside and refinanced or assumed Harborside’s debt. In connection with the acquisition of Harborside, Sun entered into a $485 million new senior secured credit facility with a syndicate of financial institutions lead by Credit Suisse as the administrative agent and collateral agent. The proceeds from the new credit facility, plus cash on hand at Sun and Harborside and the net proceeds from Sun’s issuance of $200 million aggregate principal amount of 9-1/8 percent Senior Subordinated Notes due 2015, were used to pay the purchase price for the equity of Harborside, refinance certain of the debt of Harborside and replace Sun’s prior revolving credit facility. The new credit facility, which provides for an initial interest rate of Libor plus two percent, will also provide funds for previously exercised options relating to the purchase of nine skilled nursing centers, as well as additional liquidity for Sun.
     "We are pleased to announce the completion of the acquisition of Harborside Healthcare Corporation. Having completely deconstructed and reconstructed Sun’s asset base during the last five years, management believes it now has a strong platform with which to grow the company organically and without dependence on additional acquisitions to achieve competitive margins," said Rick Matros, chairman and chief executive officer Sun Healthcare Group, Inc.

About Sun HealthCare Group Inc.
     Sun Healthcare Group Inc., with executive offices in Irvine, California, owns SunBridge Healthcare Corporation and other affiliated companies that operate long-term and postacute care centers in many states. In addition, the Sun Healthcare Group family of companies provides therapy through SunDance Rehabilitation Corporation, hospice services through SolAmor Hospice and medical staffing through CareerStaff Unlimited, Inc.