XML 34 R21.htm IDEA: XBRL DOCUMENT v3.20.2
Acquisitions and divestitures
 6 Months Ended
Jun. 30, 2020
Business Combinations [Abstract]  
Acquisitions and divestitures
Acquisitions and divestitures
Routine acquisitions
During the six months ended June 30, 2020, the Company acquired dialysis businesses consisting of three dialysis centers located in the U.S. and 25 dialysis centers located outside the U.S. for a total of $44,267 in net cash, $1,693 in deferred purchase price obligations, and $10,769 in earn-out obligations and assumed liabilities. 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 for these transactions have been recorded at estimated fair values based on the best 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 pre-acquisition tax contingencies and filing of final tax returns. In addition, valuation of certain working capital items, fixed assets and intangibles are pending final audits and related valuation reports.
The following table summarizes the assets acquired and liabilities assumed in these transactions at their estimated acquisition date fair values: 
Current assets
$
9,934

Property and equipment
9,204

Intangible and other long-term assets
7,138

Goodwill
41,584

Deferred income taxes
1,513

Current liabilities
(12,048
)
Noncontrolling interests
(596
)

$
56,729


 Amortizable intangible assets acquired during the six months ended June 30, 2020 primarily represent non-compete agreements which had weighted-average estimated useful lives of approximately four years. The total estimated amount of goodwill deductible for tax purposes associated with these acquisitions was approximately $25,475.
Sale of RMS Lifeline
The Company also divested its vascular access business, RMS Lifeline, Inc., effective May 1, 2020 and recognized a loss on sale of approximately $16,252.
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 companies a total of up to $33,785 if certain performance targets or quality margins are met primarily over the next one year to five years. As of June 30, 2020, the estimated fair value of these contingent earn-out obligations is $24,057, of which $5,832 is included in other current liabilities and the remaining $18,225 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 for the three and six month periods ended June 30, 2020:
 
Three months ended June 30, 2020
 
Six months ended June 30, 2020
Beginning balance
$
22,386

 
$
24,586

Acquisitions
3,190

 
5,861

Foreign currency translation
(510
)
 
(5,383
)
Fair value remeasurements
(642
)
 
(640
)
Payments or other settlements
(367
)
 
(367
)
Ending balance
$
24,057

 
$
24,057