Acquisitions |
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| Acquisitions | 4. Acquisitions 2025 Acquisitions During the nine months ended September 30, 2025, we completed two acquisitions within the Provider Services segment for aggregate consideration of $8.5 million. We entered these transactions in order to expand our services and geographic offerings. No cash was acquired as a part of these transactions. The operating results of the acquisitions are included in our unaudited condensed consolidated financial statements from the date of the acquisition and are not material to our results of operations. 2024 Acquisitions During the year ended December 31, 2024, we completed eight acquisitions within the Pharmacy Solutions and Provider Services segments. We entered into these transactions in order to expand our services and geographic offerings. Aggregate consideration net of cash acquired for these acquisitions was approximately $110.6 million. The operating results of these acquisitions are included in our unaudited condensed consolidated financial statements from the respective dates of the acquisition. Haven Hospice The following table summarizes the consideration paid (in thousands) for the September 1, 2024 acquisition of North Central Florida Hospice, Inc. (“Haven Hospice”) and the fair value of the assets acquired and the liabilities assumed at the acquisition date, which were adjusted for immaterial measurement-period adjustments through September 1, 2025. Haven Hospice provides hospice and palliative care services in the state of Florida. Its results are consolidated within the Provider Services segment.
Consideration for the Haven Hospice acquisition included a $15.0 million cash payment, $15.0 million seller note payable in 2028, and $30.0 million of the Company's common stock equal to 2,471,251 shares at the time of the acquisition. The number of shares was calculated by dividing $30.0 million by a price per share equal to the average of the volume weighted average trading price of the Company's common stock on each of the fifteen consecutive trading days ending on and including the trading day that is three trading days prior to the closing date, as required by the asset purchase agreement. The sellers were restricted from trading during a 180-day lock-up period from closing with agreed-upon sale volume limitations for four years thereafter. The asset purchase agreement also includes a post-closing adjustment feature to the extent any losses are incurred by the sellers in the sale of their common stock for four years following closing with a final equity adjustment feature. See Note 12. The intangible assets consist of $14.8 million in indefinite-lived licenses and $5.1 million of trade name. The fair value of acquired licenses and trade name were based upon a third-party valuation. The trade name has an estimated useful life of 10.0 years. We expect all of the goodwill will be deductible for tax purposes. The Company believes the resulting amount of goodwill reflects its expectation of synergistic benefits of the acquisition. Haven Hospice contributed $17.7 million and $50.1 million in revenue during the three and nine months ended September 30, 2025, respectively, compared to $4.8 million in revenue during the three and nine months ended September 30, 2024. Haven Hospice contributed $1.9 million and $5.1 million of operating income during the three and nine months ended September 30, 2025, respectively, compared to $0.6 million of operating income during the three and nine months ended September 30, 2024. Pro forma financial data for the Haven Hospice acquisition has not been included as the results of the operations are not material to our unaudited condensed consolidated financial statements. Others The following table summarizes the consideration paid (in thousands) for 2024 acquisitions, excluding Haven Hospice, and the estimated fair value of the assets acquired and the liabilities assumed at the acquisition dates, which are adjusted for immaterial measurement-period adjustments through September 30, 2025. Consideration for acquisitions by the Pharmacy Solutions and Provider Services segments was $27.0 million and $18.9 million, respectively.
We have estimated the fair value of acquired customer relationships, licenses, trade names, and covenants not to compete based upon third-party valuations and/or the values assigned in prior acquisitions that were deemed comparable in nature. The intangible assets consist primarily of $22.3 million in customer relationships, $5.7 million in definite-lived licenses, $2.1 million in indefinite-lived licenses, $0.6 million in covenants not to compete, and $0.5 million in trade names. Definite-lived intangible assets have an estimated weighted average useful life of 14.9 years. We expect $12.0 million of the goodwill will be deductible for tax purposes. The Company believes the resulting amount of goodwill reflects its expectation of synergistic benefits of the acquisitions. The above acquisitions contributed approximately $20.5 million and $62.3 million in revenue during the three and nine months ended September 30, 2025, respectively, compared to $21.8 million and $37.7 million in revenue during the three and nine months ended September 30, 2024. The above acquisitions contributed approximately $0.3 million and $3.1 million in operating income during the three and nine months ended September 30, 2025, respectively, compared to $2.0 million and $3.0 million in operating income during the three and nine months ended September 30, 2024. Pro forma financial data for the 2024 acquisitions has not been included as the results of the operations are not material to our unaudited condensed consolidated financial statements. Measurement period adjustments for all aforementioned acquisitions completed in 2024 recorded in the three and nine months ended September 30, 2025 were not material to the unaudited condensed consolidated financial statements. The Company expects to finalize the purchase price allocation for the 2024 acquisitions prior to the one-year anniversary date of each acquisition. During the three and nine months ended September 30, 2024, the Company incurred approximately $0.2 million and $2.1 million in transaction costs, respectively, related to all 2024 acquisitions, including those acquisitions completed in subsequent quarters of 2024. These costs are included in selling, general, and administrative expenses in our unaudited condensed consolidated statements of operations. The Company also agreed to purchase the remaining 30% noncontrolling interest in Gateway Pediatric Therapy, LLC during the first fiscal quarter of 2024 and the remaining 45% noncontrolling interest in Harvest Grove LTC, LLC during the third fiscal quarter of 2024. These transactions did not meet the definition of a business combination in accordance with ASC 805, Business Combinations. |