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Acquisitions
 9 Months Ended
Sep. 30, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Acquisitions Acquisitions
Nova Acquisition
Effective March 1, 2025, the Company acquired Nova Medical Centers (“Nova”). CHSI entered into an equity purchase agreement to acquire all of the outstanding membership interests for a purchase price of $265.0 million, subject to adjustment in accordance with the terms and conditions set forth in the purchase agreement. We financed the transaction using a combination of $102.1 million of new debt financing under the Credit Agreement, $50.0 million of available borrowing capacity under our existing Revolving Credit Facility, and the remaining with cash on hand.
Nova operates 67 occupational health centers in five states, providing workers’ compensation injury care services, physical therapy, drug and alcohol screening, and pre-employment physicals as part of their full suite of occupational health services.
The Nova acquisition met the definition of a business pursuant to ASC Topic 805, Business Combinations, and the acquisition was accounted for as a business combination under the acquisition method of accounting. The Company allocated the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed based on their preliminary estimated fair values. The fair values are based on inputs that are unobservable in the market and therefore represent Level 3 inputs.
The Company is in the process of completing its assessment of the acquisition-date fair values of the assets acquired and liabilities assumed and determining the estimated useful lives of long-lived assets and finite-lived intangible assets; therefore, the values set forth are subject to adjustment during the measurement period. The amount of these potential adjustments could be significant. The Company expects to complete its final purchase price allocation during the 12-month period subsequent to the Nova acquisition closing date.
Pursuant to ASC Topic 810, Consolidation, certain Nova affiliated entities were determined to be a variable interest entity, and the Company was determined to be their primary beneficiary. As a result, the Company obtained a controlling financial interest and Nova has been consolidated into the Company's financial results.
The following table reconciles the preliminary allocation of estimated fair value of the assets acquired and liabilities assumed to the consideration given for the acquired business (in thousands):
Accounts receivable
$18,822 
Other current assets
1,525 
Operating lease right-of-use assets
30,080 
Property and equipment
2,636 
Goodwill
209,453 
Identifiable intangible assets
38,830 
Other assets
8,769 
Total assets
310,115 
Accrued and other current liabilities
5,001 
Non-current operating lease liabilities
30,080 
Other non-current liabilities
10,029 
Total liabilities
45,110 
Consideration given
$265,005 

The measurement period adjustments recorded in the third quarter primarily relate to adding an indemnification asset for profit interest and the related tax liability.
The preliminary valuations of tangible assets were derived using a combination of the market and cost approaches. Significant judgments used in valuing tangible assets include estimated determination of age, condition, remaining useful life, and estimated fair market value.
The preliminary estimated fair values of identifiable intangible assets, consisting of customer relationships, were determined with the assistance of a third-party valuation specialist. The fair values are based on inputs that are unobservable in the market and therefore represent Level 3 inputs. Preliminary fair values assigned to identifiable intangible assets were determined using the income approach which relies on the following assumptions: discount rate, customer attrition rates, EBITDA margin, and useful life of customer relationships. The analysis and related valuations reflect the conclusions of management. All estimates, key assumptions, and forecasts were either provided by or reviewed by the Company. Useful lives for identifiable intangible assets were determined based upon the income approach, which determines the remaining useful economic lives of the identifiable intangible assets that are expected to contribute directly or indirectly to future cash flows.
Fair ValueWeighted Average Amortization Period
(in thousands)(in years)
Customer relationships$38,830 9 years
Identifiable intangible assets$38,830 

The preliminary estimate for goodwill of $209.5 million has been recognized for the business combination, representing the excess of the consideration given over the fair value of identifiable net assets acquired. The value of goodwill is derived from Nova’s future earnings potential and its assembled workforce. The amount of goodwill is expected to be deductible for tax purposes.

For the three months ended September 30, 2025, Nova had total revenue of $31.3 million, which was included in the condensed consolidated financial statements. For the period March 1, 2025 through September 30, 2025, Nova had total revenue of $73.9 million, which was included in the condensed consolidated financial statements.
Pivot Onsite Innovations Acquisition
Effective June 1, 2025, the Company acquired Onsite Innovations, LLC (“Pivot Onsite Innovations”) from Pivot Occupational Health, LLC. CHSI entered into an equity purchase agreement to acquire all of the outstanding equity interests for a purchase price of $54.4 million, subject to adjustment in accordance with the terms and conditions set forth in the purchase agreement. We financed the transaction using a combination of $35.0 million of available borrowing capacity under our existing Revolving Credit Facility and the remaining with cash on hand.
Pivot Onsite Innovations operates over 240 onsite health clinics at employer locations in over 40 states, providing occupational health, wellness, prevention, and performance services. The acquisition enabled the Company to expand to over 400 onsite health clinics at employer worksites.
The Pivot Onsite Innovations acquisition met the definition of a business pursuant to ASC Topic 805, Business Combinations, and the acquisition was accounted for as a business combination under the acquisition method of accounting. The Company allocated the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their preliminary estimated fair values. The fair values are based on inputs that are unobservable in the market and therefore represent Level 3 inputs.
The Company is in the process of completing its assessment of the acquisition-date fair values of assets acquired and liabilities assumed and determining the estimated useful lives of long-lived assets and finite-lived intangible assets; therefore, the values set forth are subject to adjustment during the measurement period. The amount of these potential adjustments could be significant. The Company expects to complete its final purchase price allocation during the 12-month period subsequent to the Pivot Onsite Innovations acquisition closing date.
Pursuant to ASC Topic 810, Consolidation, the Company obtained a controlling interest in the company by acquiring all of the outstanding equity interests of Pivot Onsite Innovations. As a result, Pivot Onsite Innovations has been consolidated into the Company's financial results.
The following table reconciles the preliminary allocation of estimated fair value of the assets acquired and liabilities assumed to the consideration given for the acquired business (in thousands):
Accounts receivable
$8,638 
Other current assets
183 
Goodwill
34,502 
Identifiable intangible assets
14,340 
Other assets
192 
Total assets57,855 
Accrued and other current liabilities
3,189 
Other non-current liabilities
218 
Total liabilities3,407 
Consideration given
$54,448 
The preliminary valuations of tangible assets were derived using a combination of the market and cost approaches. Significant judgments used in valuing tangible assets include estimated determination of age, condition, remaining useful life, and estimated fair market value.
The preliminary estimated fair values of identifiable intangible assets, consisting of customer relationships, were determined with the assistance of a third-party valuation specialist. The fair values are based on inputs that are unobservable in the market and therefore represent Level 3 inputs. Preliminary fair values assigned to identifiable intangible assets were determined using the income approach which relies on the following assumptions: discount rate, customer attrition rates, EBITDA margin, and useful life of customer relationships. The analysis and related valuations reflect the conclusions of management. All estimates, key assumptions, and forecasts were either provided by or reviewed by the Company. Useful lives for identifiable intangible assets were determined based upon the income approach, which determines the remaining useful economic lives of the identifiable intangible assets that are expected to contribute directly or indirectly to future cash flows.
Fair ValueWeighted Average Amortization Period
(in thousands)(in years)
Customer relationships$14,340 
7 years
Identifiable intangible assets$14,340 
The preliminary estimate for goodwill of $34.5 million has been recognized for the business combination, representing the excess of the consideration given over the fair value of identifiable net assets acquired. The value of goodwill is derived from Pivot Onsite Innovations’ future earnings potential and its assembled workforce. The amount of goodwill is expected to be deductible for tax purposes.
For the three months ended September 30, 2025, Pivot Onsite Innovations had total revenue of $16.6 million, which was included in the condensed consolidated financial statements. For the period June 1, 2025 through September 30, 2025, Pivot Onsite Innovations had total revenue of $22.1 million, which was included in the condensed consolidated financial statements.
Pro Forma Results
The following unaudited consolidated pro forma financial results combine the historical results of Nova, Pivot Onsite Innovations and the Company to present the results as if the Nova and Pivot Onsite Innovations acquisitions had occurred on January 1, 2024. The pro forma information is presented for illustration purposes only and is not necessarily indicative of results of operations that would have been achieved had the acquisitions occurred on that date, nor is it indicative of future results.

Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
(unaudited)
(in thousands)
Total revenue$572,800 $541,036 $1,671,250 $1,582,418 
Net income attributable to the Company
$50,631 $46,448 $141,460 $150,210 
The pro forma financial information is based on the preliminary allocation of the purchase price of the Nova and Pivot Onsite Innovations acquisitions and is therefore subject to adjustment upon finalizing the purchase price allocation, as described above, during the measurement period. The net income tax impact was calculated at the effective tax rate, as if Nova and Pivot Onsite Innovations had been a subsidiary of the Company as of January 1, 2024.
Pro forma results were adjusted to exclude acquisition-related expenses incurred by the Company that are directly attributable to the transactions. These excluded costs primarily consist of legal, advisory, and transaction-related compensation expenses that are nonrecurring in nature and not reflective of the ongoing operations of the combined business.