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Acquisitions and Dispositions
9 Months Ended
Sep. 30, 2013
Discontinued Operations and Disposal Groups [Abstract]  
Acquisitions and Dispositions
Acquisitions and Dispositions
Acquisitions
Appalachian Regional Health Systems
Effective September 30, 2013, the Company completed its acquisition of the assets and business of Appalachian Regional Health Systems, a provider of home health services with offices in Boone and Newland, North Carolina. Total consideration of $2.7 million, subject to post-closing adjustments, consisted of $2.1 million from the Company's existing cash reserves and $0.6 million held in escrow for certain post closing matters. The purchase price was allocated to goodwill ($2.6 million) and identifiable intangible assets ($0.1 million).
Wake Forest Baptist Health Care at Home, LLC
Effective August 23, 2013, the Company acquired 60 percent interest in the membership units of Wake Forest Baptist Health Care at Home, LLC for approximately $2.4 million, consisting of $2.2 million in cash and $0.2 million of other assets, and entered into an operating agreement with Wake Forest University Baptist Medical Center to provide home health services in the Winston-Salem, North Carolina geographical area.
Hope Hospice, Inc
Effective April 30, 2013, the Company completed its acquisition of the assets and business, pursuant to an asset purchase agreement, of Hope Hospice, Inc., a provider of hospice services located in Rochester, Indiana. Total non-cash consideration of $1.0 million consisted of the assumption of Hope Hospice's outstanding debt and existing liabilities as of the closing date. The purchase price was allocated to Medicare licenses ($0.5 million), accounts receivable ($0.3 million) and goodwill ($0.2 million).
Advocate Hospice
Effective July 22, 2012, the Company completed its acquisition of the assets and business of Advocate Hospice, a provider of hospice services located in Danville, Indiana, for consideration of $5.5 million, excluding transaction costs and subject to post-closing adjustments. The consideration included entering into an option purchase agreement with a third party covering membership interests in Advocate Hospice.
Additional consideration of up to $2.0 million was payable under the option agreement if certain earnout conditions were met, which the Company estimated fair value at acquisition date of $1.9 million, on a discounted cash flow basis. At December 31, 2012, the Company estimated the fair value of the contingent consideration at $1.1 million based upon certain average daily census growth targets and recorded a $0.8 million adjustment to the contingent consideration. During the second quarter of 2013, the average daily census growth target was met and the Company paid $1.5 million from the escrow to the sellers and retained $0.5 million in escrow for remaining indemnification provisions under the agreement. As such, the Company recorded a $0.9 million charge to adjust the contingent consideration to fair value, which is reflected in selling, general and administrative expense in the Company's consolidated statements of comprehensive income for the nine months ended September 30, 2013. During the third quarter of 2013, in accordance with the escrow agreement, an additional $0.2 million was paid to the sellers from the escrow fund.
Family Home Care Corporation
Effective August 31, 2012, the Company completed its acquisition of the assets and business of Family Home Care Corporation, one of the leading providers of home health and hospice services in the Washington and Idaho markets. Total consideration of $12.3 million, excluding transaction costs and subject to post-closing adjustments, was paid at the time of closing from the Company's existing cash reserves. The purchase price was allocated to goodwill ($5.6 million), identifiable intangible assets ($6.2 million) and other assets ($0.5 million).
North Mississippi Hospice
Effective August 31, 2012, the Company completed its acquisition of the assets and business of North Mississippi Hospice, a provider of hospice services with offices in Oxford, Southhaven and Tupelo, Mississippi. Total consideration of $4.7 million, excluding transaction costs and a post-closing adjustment of $0.2 million was paid from the Company's existing cash reserves. The purchase price was allocated to goodwill ($3.3 million) and identifiable intangible assets ($1.4 million).
Dispositions
Gentiva Consulting, Louisiana Home Health and Hospice Dispositions
Effective May 31, 2012, the Company completed the sale of its Gentiva consulting business to MP Healthcare Partners, LLC, pursuant to an asset purchase agreement, for cash consideration of approximately $0.3 million.
During the second quarter of 2012, the Company sold eight home health branches and four hospice branches in Louisiana, pursuant to an asset purchase agreement, for total consideration of approximately $6.4 million. The Company received proceeds of approximately $5.9 million during the first nine months of 2012 and established a receivable of approximately $0.5 million, which the Company received during the second quarter of 2013.
In connection with the sales, the Company recorded a gain on sale of businesses in the Company’s consolidated statements of comprehensive income of approximately $5.4 million for the first nine months of 2012.