Genesis Health Ventures Files Preliminary Proxy Regarding Revision of Multicare Joint Venture.

KENNETT SQUARE, Pa.--(BW HealthWire)--Sept. 16, 1999--

Genesis Health Ventures, Inc. (NYSE: GHV) announced today it has filed a preliminary shareholder proxy with the Securities and Exchange Commission in connection with the revision of the Multicare joint venture.

If approved, The Cypress Group (Cypress) and Texas Pacific Group (TPG) will invest $50 million into GHV in exchange for 12.5 newly issued common shares and 2 million warrants with a $5.00 exercise price. In addition, Cypress and TPG will terminate their right to put their 56% equity interest in Genesis ElderCare Corp. to GHV in exchange for newly issued convertible preferred stock in GHV with a $420 million principal amount, a 5% dividend rate (payable in kind for the first five years) and a conversion price of $8.75 per share. This restructuring is subject to regulatory and shareholder approval which is expected in the GHV first fiscal quarter of 2000.

GHV also announced it has filed an amendment to its June 30, 1999 Form 10-Q which, among other things, includes its amended senior bank debt agreements that allow for relief from existing debt covenants and provides the company with an additional $40 million in bank availability, subject to closing of the $50 million investment into GHV and satisfaction of certain conditions.

In addition, GHV continues to pursue deleveraging transactions of approximately $200 million in an effort to improve the Company's financial position.

Genesis Health Ventures provides eldercare in the eastern US through a network of Genesis ElderCare skilled nursing and assisted living centers and long term care support services nationwide including pharmacy, medical equipment and supplies, rehabilitation, group purchasing, consulting and facility management.

Statements in this press release which are not historical facts, including statements regarding the Company's expected earnings, anticipated charges, the expected impact of the Medicare prospective pay system and expected capital requirements are forward-looking statements.

The Company cautions investors that any forward-looking statements made by the Company involve risks and uncertainties and are not guarantees of future performance.

Numerous factors exist which, in some cases have affected, and, in the future, could cause results to differ materially from these expectations, including the Company's substantial indebtedness and significant debt service obligations, the Company's ability to obtain capital to fund deleveraging transactions and future growth, changes in the healthcare system, government regulation, dependence on reimbursement by third party payors, competition, the implementation and interpretation of healthcare reform legislation and other factors as detailed from time to time in the Company's filings with the Securities and Exchange Commission.