Acquisitions

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

During the nine months ended September 30, 2023 and 2022, the Company completed certain acquisitions to strengthen its current market share in existing markets. Each of the Company’s acquisitions was accounted for using the acquisition method pursuant to the requirements of FASB ASC Topic 805, Business Combinations, and are included in the Company’s consolidated financial statements since the respective acquisition date. The goodwill generated from these acquisitions is attributable to expected growth and cost synergies and the expected contribution of each acquisition to the Company’s overall strategy. The goodwill recorded during the nine months ended September 30, 2023 is expected to be deductible for tax purposes. The estimated fair values of the net assets of acquired businesses as described below are subject to change resulting from such items as final analysis of valuations and working capital adjustments post-acquisition. As a result, the acquisition accounting for certain acquired businesses could change in subsequent periods resulting in adjustments to goodwill once finalized.

Nine Months Ended September 30, 2023

During the nine months ended September 30, 2023, the Company acquired 100% of the equity interests of three providers of home medical equipment ("HME") and acquired certain assets from two providers of home medical equipment. The following table summarizes the consideration paid at closing for all acquisitions during the nine months ended September 30, 2023 (in thousands):


Cash	$	18,173
Deferred payments	50
Total	$	18,223

The Company allocated the consideration paid to the net assets acquired based on their estimated acquisition date fair values. Based upon management’s evaluation, which is preliminary and subject to completion of working capital and other adjustments, the consideration paid for all acquisitions during the nine months ended September 30, 2023 was allocated as follows during the period (in thousands):


Cash	$	256
Accounts receivable	1,798
Inventory	1,413
Prepaid and other current assets	10
Equipment and other fixed assets	9,008
Operating lease right-of-use assets	5,506
Finance lease right-of-use assets	200
Goodwill	7,297
Accounts payable and accrued expenses	(713)
Other current liabilities	(846)
Operating lease liabilities	(5,506)
Finance lease liabilities	(200)
Net assets acquired	$	18,223

Nine Months Ended September 30, 2022

During the nine months ended September 30, 2022, the Company acquired 100% of the equity interests of two providers of HME and acquired certain assets from five providers of home medical equipment.

The following table summarizes the consideration paid at closing for all acquisitions during the nine months ended September 30, 2022 (in thousands):


Cash	$	16,477
Deferred payments	422
Total	$	16,899

The Company allocated the consideration paid to the net assets acquired based on their estimated acquisition date fair values. Based upon management’s evaluation, which was preliminary and subject to completion of working capital and other adjustments, the consideration paid for all acquisitions during the nine months ended September 30, 2022 was allocated as follows during that period (in thousands):


Cash	$	155
Accounts receivable	2,206
Inventory	686
Prepaid and other current assets	16
Equipment and other fixed assets	4,502
Goodwill	11,788
Identifiable intangible assets	500
Accounts payable and accrued expenses	(2,820)
Contract liabilities	(134)
Net assets acquired	$	16,899

During the nine months ended September 30, 2022, the Company received net cash of $0.2 million relating to working capital and other adjustments associated with businesses that were acquired during 2021, which was recorded as a decrease to goodwill within the respective measurement period.

Net revenue and operating income in the period of acquisition since the respective acquisition dates for the acquisitions described above were immaterial for the three and nine months ended September 30, 2023 and 2022.