Acquisitions

12 Months Ended

Dec. 31, 2011

Acquisitions

Acquisitions

4.Acquisitions

2011 – Successor

We completed 11 acquisitions within our Residential Services, ResCare HomeCare and Youth Services segments during 2011. Aggregate consideration for these acquisitions was approximately $28.3 million, including $2.1 million of notes issued, cash received of $0.3 million and net forgiveness of management fees and promissory note of $2.7 million. These acquisitions are expected to generate annual revenues of approximately $48 million. The operating results of the acquisitions are included in the consolidated financial statements from the date of acquisition.

The preliminary aggregate purchase price for these acquisitions was allocated as follows:

Cash	$	307
Accounts receivable	1,730
Property and equipment	363
Other intangible assets	5,688
Goodwill	20,458
Prepaid expenses and other current assets	88
Liabilities	(376		)
Aggregate purchase price	$	28,258

The other intangible assets consist primarily of customer relationships, trade names and covenants not to compete, which will all be amortized over five to twenty years. We expect all of the $20.5 million of goodwill will be deductible for tax purposes.

2010 – Successor

During the successor period, we completed an acquisition on December 1, 2010 within our ResCare HomeCare segment. Total consideration for this acquisition was approximately $7.2 million. This acquisition is expected to generate annual revenues of approximately $12.2 million. The operating results of this acquisition are included in the consolidated statement of operations from the date of acquisition.

The purchase price allocation for this acquisition was as follows:

Property and equipment	$	8
Other intangible assets	2,270
Goodwill	4,892
Prepaid expenses and other current assets	22
Aggregate purchase price	$	7,192

Approximately $2.3 million of other intangible assets will be amortized over five to twenty years and consist of $0.1 million of company trade name, $0.1 million of covenants not-to-compete and $2.1 million of customer relationships. The entire balance of goodwill was allocated to the ResCare HomeCare segment. We expect all of the $4.9 million of goodwill will be deductible for tax purposes.

2010 – Predecessor

During the predecessor period, we completed eleven acquisitions within our Residential Services and ResCare HomeCare segments. Total consideration for these acquisitions was approximately $25.4 million, including $4.1 million of notes issued. These acquisitions are expected to generate annual revenues of approximately $55.3 million. The operating results of these acquisitions are included in the consolidated statement of operations from the date of acquisition.

The purchase price allocation for these acquisitions was as follows:

Property and equipment	$	244
Other intangible assets	10,523
Goodwill	14,738
Prepaid expenses and other current assets	111
Liabilities assumed	(245		)
Aggregate purchase price	$	25,371

Approximately $8.6 million of other intangible assets are amortized over five to twenty years and consist of $1.0 million of company trade name, $2.0 million of covenants not-to-compete and $5.6 million of customer relationships, with $1.9 million of other intangibles not subject to amortization. Amortization expense for the above intangible assets totaled $5.8 million for the period ended November 15, 2010. The entire balance of goodwill was allocated to the Residential Services and ResCare HomeCare segments.