Business Combinations

12 Months Ended

Dec. 31, 2023

Business Combination and Asset Acquisition [Abstract]

During February 2023, the Company entered into the Connecticut market through the acquisition of Privia Quality Network Connecticut (“PQN-CT”), whereby Privia acquired a 51% ownership interest in PQN-CT. The acquisition was accounted for using the acquisition method pursuant to the requirements of ASC 805. The results of operations of the acquisition have been included in the Company’s consolidated financial statements since the date of acquisition.

During August 2023, the Company launched Washington Friendly Medical Group, a physician-owned Medical Group, with Washington Nominee PC, an entity entirely owned by a Nominee Physician, owning majority membership interest and having

governance and control rights via the governing documents of Washington Friendly Medical Group. The Company has a contractual relationship with the Washington Nominee PC and its Nominee Physician owner through a Restriction Agreement. Washington Nominee PC owns 51% interest in Washington Friendly Medical Group. The results of operations of the acquisition have been included in the Company’s consolidated financial statements since the date of acquisition.

During October 2023, the Company acquired Privia Medical Group South Carolina, LLC, (“PMG SC”). PMG SC is a physician-owned Medical Group, with PMG South Carolina Holdings, PLLC (“Friendly SC PC”), a South Carolina professional limited liability company entirely owned by a licensed physician with a leadership role in the Company, owning majority membership interests and having governance and control rights via the governing documents of PMG SC. The Company has a contractual relationship with Friendly SC PC through a Restriction Agreement. PMG SC owns 51% interest in Friendly SC PC. The results of operations of the acquisition have been included in the Company’s consolidated financial statements since the date of acquisition.

The purchase price for the acquisitions noted above was allocated as follows:


(Dollars in thousands)	Total Acquisitions for the Year Ended December 31, 2023		Total Acquisitions for the Year Ended December 31, 2021
Cash paid, net of cash acquired	$	42,858	$	32,228
Contingent payables	344		2,942
Total consideration	$	43,202	$	35,170

Accounts receivable, lease receivable, prepaids, and other current assets	$	—	$	4,735
Fixed assets	—		292
Accounts payable and other current liabilities assumed	—		(5,378)
Payer contract and physician network intangibles	55,603		4,270
Management services agreement intangible	—		51,800
Goodwill	11,811		8,275
Fair value of non-controlling interests	(24,212)		(28,824)
Total acquired net assets	$	43,202	$	35,170

The goodwill relating to these acquisitions is not deductible for tax purposes and is primarily attributable to synergies related to the assembled workforce. Goodwill is measured as the excess of the consideration transferred over the fair value of assets acquired and liabilities assumed on the acquisition date. For the 2023 transactions related to Washington and South Carolina, the Company is in the process of completing its formal valuation analysis to identify and determine the fair value of tangible and identifiable intangible assets acquired and the liabilities assumed. Thus, the final allocation of the purchase price may differ from the preliminary estimates used at December 31, 2023 based on additional information obtained and completion of the valuation of the identifiable intangible assets. The Company does not expect any adjustments, if necessary, to be material.