Acquisitions and Disposals

9 Months Ended

Sep. 30, 2015

Business Combinations [Abstract]

Acquisitions and Disposals

Acquisitions and Disposals

The Company acquired the majority-ownership of four home health agencies, one hospice agency, and one community-based services agency during the nine months ended September 30, 2015. The total aggregate purchase prices for the Company’s acquisitions were $4.2 million, of which $3.9 million was paid in cash. The purchase prices are determined based on the Company’s analysis of comparable acquisitions and the target market’s potential future cash flows.

Acquired intangible assets consist of a Certificate of Need, Medicare licenses, Medicaid licenses, non-compete agreements, and trade names. The fair value of the acquired intangible assets was $2.0 million, which are preliminary pending the final valuation of those assets.

The Company's home health services segment, hospice services segment, and community-based services segment recognized goodwill of $0.6 million, $1.4 million, and $0.2 million, respectively. Goodwill generated from the acquisitions was recognized based on the expected contribution of the acquisitions to the overall corporate strategy. The Company expects its portion of goodwill to be fully tax deductible. The acquisitions were accounted for under the acquisition method of accounting, and, accordingly, the accompanying interim financial information includes the results of operations of the acquired entities from the dates of acquisition.