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Acquisitions and Dispositions of Businesses
 9 Months Ended
Sep. 30, 2023
Acquisitions And Dispositions [Abstract]  
Acquisitions and Dispositions of Businesses ACQUISITIONS AND DISPOSITIONS OF BUSINESSES
Acquisitions. During 2023, the Company acquired four businesses: two in healthcare, one in automotive, and one in other businesses for $82.3 million in cash and contingent consideration and the assumption of floor plan payables. The assets and liabilities of the companies acquired were recorded at their estimated fair values at the date of acquisition.
In September 2023, the Company’s automotive subsidiary acquired a Toyota automotive dealership, including the real property for the dealership operations. In addition to a cash payment and the assumption of $2.2 million in floor plan payables, the automotive subsidiary borrowed $37.0 million to finance the acquisition. The dealership is
operated and managed by an entity affiliated with Christopher J. Ourisman, a member of the Ourisman Automotive Group family of dealerships. This acquisition expands the Company’s automotive business operations and is included in automotive.
In July 2023, the Company acquired a small business which is included in other businesses.
In January 2023, Graham Healthcare Group (GHG) acquired two small businesses which are included in healthcare.
During 2022, the Company acquired seven businesses: five in healthcare and two in automotive, for $143.2 million in cash and contingent consideration and the assumption of floor plan payables. The assets and liabilities of the companies acquired were recorded at their estimated fair values at the date of acquisition.
In May 2022, GHG acquired two small businesses which are included in healthcare.
On July 5, 2022, the Company’s automotive subsidiary acquired two automotive dealerships, including the real property for the dealership operations. In addition to a cash payment and the assumption of $10.9 million in floor plan payables, the automotive subsidiary borrowed $77.4 million to finance the acquisition. The dealerships are operated and managed by an entity affiliated with Christopher J. Ourisman, a member of the Ourisman Automotive Group family of dealerships. These acquisitions expand the Company’s automotive business operations and are included in automotive.
In July 2022, GHG acquired a 100% interest in a multi-state provider of ABA clinics. The acquisition is expected to expand the product offerings of the healthcare division and is included in healthcare.
In August 2022, GHG acquired two small businesses which are included in healthcare.
Acquisition-related costs for acquisitions that closed during the first nine months of 2023 and 2022 were $1.2 million and $1.6 million, respectively. The aggregate purchase price of the 2023 and 2022 acquisitions was allocated as follows (2023 on a preliminary basis), based on acquisition date fair values to the following assets and liabilities:
Purchase Price Allocation
Nine Months EndedYear Ended
(in thousands)September 30, 2023December 31, 2022
Accounts receivable$68 $3,172 
Inventory5,224 21,278 
Property, plant and equipment29,859 36,255 
Lease right-of-use assets— 4,773 
Goodwill44,968 53,946 
Indefinite-lived intangible assets6,300 41,800 
Amortized intangible assets235 1,200 
Other assets4 404 
Deferred income taxes— 2,535 
Floor plan payables(2,215)(10,908)
Other liabilities(935)(3,798)
Current and noncurrent lease liabilities(1,184)(5,865)
Redeemable noncontrolling interest— (2,164)
Noncontrolling interest— (512)
Aggregate purchase price, net of cash acquired$82,324 $142,116 
The 2023 fair values recorded were based upon preliminary valuations and the estimates and assumptions used in such valuations are subject to change within the measurement period (up to one year from the acquisition date). The recording of the amounts of residual goodwill and other intangibles are not yet finalized. Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The goodwill recorded due to these acquisitions is attributable to the assembled workforces of the acquired companies and expected synergies. The Company expects to deduct $44.0 million and $39.7 million of goodwill for income tax purposes for the acquisitions completed in 2023 and 2022, respectively.
The acquired companies were consolidated into the Company’s financial statements starting on their respective acquisition dates. The Company’s Condensed Consolidated Statements of Operations for the third quarter of 2023 include aggregate revenues and operating losses for the companies acquired in 2023 of $2.4 million and $0.1 million, respectively. The Company’s Condensed Consolidated Statements of Operations include aggregate revenues and operating losses of $3.5 million and $0.1 million, respectively, for the nine months ended
September 30, 2023. The following unaudited pro forma financial information presents the Company’s results as if the current year acquisitions had occurred at the beginning of 2022. The unaudited pro forma also includes the 2022 acquisitions as if they occurred at the beginning of 2021:
Three Months Ended 
 September 30		Nine Months Ended 
 September 30
(in thousands)2023202220232022
Operating revenues$1,150,953 $1,053,162 $3,363,004 $3,148,090 
Net (loss) income(18,235)36,255 162,653 78,704 
These pro forma results were based on estimates and assumptions, which the Company believes are reasonable, and include the historical results of operations of the acquired companies and adjustments for depreciation and amortization of identified assets and the effect of pre-acquisition transaction related expenses incurred by the Company and the acquired entities. The pro forma information does not include efficiencies, cost reductions and synergies expected to result from the acquisitions. They are not the results that would have been realized had these entities been part of the Company during the periods presented and are not necessarily indicative of the Company’s consolidated results of operations in future periods.
Disposition of Businesses. In June 2023, the Company entered into an agreement to merge the Pinna business with Realm of Possibility, Inc. (Realm) in return for an additional noncontrolling financial interest in Realm (the Pinna transaction). The Company deconsolidated the Pinna subsidiary, which was included in other businesses, and continues to account for its interest in Realm under the equity method of accounting (see Notes 3 and 12).
In October 2022, the Company entered into an agreement to merge the CyberVista business with CyberWire, Inc. in return for a noncontrolling financial interest in the merged entity, N2K Networks, Inc. (the CyberVista transaction). The Company deconsolidated the CyberVista subsidiary, which was included in other businesses, and accounts for its continuing interest in N2K Networks under the equity method of accounting (see Note 3).
Other Transactions. In November 2022, a CSI Pharmacy Holdings Company, LLC (CSI) minority shareholder put some shares to the Company, which had a redemption value of $1.2 million. Following the redemption, the Company owns 76.5% of CSI.