Acquisitions and Joint Ventures

6 Months Ended

Jun. 30, 2018

Business Combinations [Abstract]

Acquisitions and Joint Ventures

Acquisitions and Joint Venture Activities

The Company acquired the majority-ownership of three home health agencies Nason Home Health in Roaring Springs, Pennsylvania, 1st Choice Home Health Care in Denton, Texas, and Prime Healthcare Services in Reno, Nevada during the six months ended June 30, 2018. The total aggregate purchase price for these transactions was $3.6 million, of which $3.5 million was primarily paid in cash. The purchase prices were determined based on the Company’s analysis of comparable acquisitions and the target market’s potential future cash flows. Substantially all of the preliminary allocation of the purchase price for the acquisitions were allocated to goodwill of $4.3 million, indefinite lived intangibles-trade names of $0.6 million, and Certificates of need/licenses of $0.5 million. Acquired noncontrolling interest was $2.1 million.

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. Accordingly, the accompanying interim financial information includes the results of operations of the acquired entities from the date of acquisition.    

During the six months ended June 30, 2018, the Company sold ownership interests in four of its wholly-owned subsidiaries. The total purchase prices for the sale of such ownership interests were $3.8 million, all of which were accounted for as equity transactions, resulting in the Company reducing additional paid in capital by $2.7 million.