Acquisitions and Disposals

3 Months Ended

Mar. 31, 2017

Business Combinations [Abstract]

Acquisitions and Disposals

Acquisitions and Disposals

On January 1, 2017, the Company formed a joint venture with LifePoint Health, Inc. ("LifePoint"). LifePoint contributed 12 home health agencies, seven hospice agencies, and one in-patient hospice unit to the joint venture. The Company acquired majority ownership of the membership interests of these agencies. These providers conduct home health operations in Arizona, Colorado, Louisiana, Tennessee, Texas, and Virginia; and hospice operations in North Carolina, Pennsylvania, Tennessee, and Virginia.

In a separate transaction, the Company acquired a pharmacy, which is reported in the facility-based services segment, during the three months ended March 31, 2017.

The total aggregate purchase price for these transactions was $11.9 million, of which $10.4 million was paid in December 2016 and the remainder was primarily paid in cash in the three months ended March 31, 2017. The purchase prices are determined based on the Company’s analysis of comparable acquisitions and the target market’s potential future cash flows.

Goodwill generated from the acquisitions was recognized based on the expected contributions of each acquisition 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 date of acquisition.    

The following table summarizes the aggregate consideration paid for the acquisitions and the amounts of the assets acquired and liabilities assumed at the acquisition dates, as well as their fair value at the acquisition dates and the noncontrolling interest acquired (amounts in thousands):

Consideration
Cash	$	10,880
Fair value of total consideration transferred
Recognized amounts of identifiable assets acquired and liabilities assumed
Patient accounts receivable	4,399
Trade name	2,200
Certificates of needs/licenses	3,271
Other identifiable intangible assets	6
Other assets and (liabilities), net	(984		)
Total identifiable assets	8,892
Noncontrolling interest	9,398
Goodwill, including noncontrolling interest of $4,956	$	11,386

The Company conducted a preliminary assessment and has recognized provisional amounts in its initial accounting for the acquisition of the majority ownership in the LifePoint joint venture partnership for all identified assets in accordance with the requirements of ASC Topic 805. The Company is continuing its review of these matters during the measurement period, and if new information obtained about facts and circumstances that existed at the acquisition date identified adjustments to the assets purchased initially recognized, the acquisition accounting will be revised to reflect the resulting adjustments to the provisional amounts initially recognized.

On April 1, 2017, LifePoint contributed seven home health agencies and five hospice agencies to the joint venture. The Company paid $4.5 million for this contribution on March 31, 2017, which is recorded in Other Assets on the consolidated balance sheet.