Acquisitions and divestitures

3 Months Ended

Mar. 31, 2022

Routine acquisitions

During the three months ended March 31, 2022, the Company acquired dialysis businesses consisting of three dialysis centers located outside the U.S. for total net cash of $5,166, contingent earn-out obligations of $245 and deferred purchase price and liabilities assumed of $2,251. The assets and liabilities for these acquisitions were recorded at their estimated fair values at the dates of the acquisitions and are included in the Company’s condensed consolidated financial statements, as are their operating results, from the designated effective dates of the acquisitions.

The initial purchase price allocations have been recorded at estimated fair values based on information available to management and will be finalized when certain information arranged to be obtained has been received. In particular, certain income tax amounts are pending final evaluation and quantification of any pre-acquisition tax contingencies. In addition, valuation of intangibles, leases and certain other working capital items relating to these acquisitions are pending final quantification.

Goodwill deductible for tax purposes associated with acquisitions completed during the three months ended March 31, 2022 was $4,442.

Contingent earn-out obligations

The Company has several contingent earn-out obligations associated with acquisitions that could result in the Company paying the former owners of acquired businesses a total of up to approximately $71,645 if certain performance targets or quality margins are met over the next one year to five years.

Contingent earn-out obligations are remeasured to fair value at each reporting date until the contingencies are resolved with changes in the liability due to the remeasurement recognized in earnings. As of March 31, 2022, the Company estimated the fair value of these contingent earn-out obligations to be $34,193, of which $9,238 is included in other current liabilities and the remaining $24,955 is included in other long-term liabilities in the Company’s consolidated balance sheet.

The following is a reconciliation of changes in contingent earn-out obligations:


	Three months ended March 31, 2022
Beginning balance	$	33,600
Acquisitions	245
Foreign currency translation	3,248
Fair value remeasurements	21
Payments	(2,921)
Ending balance	$	34,193