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Acquisition | 12 Months Ended
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Dec. 31, 2024
Business Combinations [Abstract] |
Acquisition | 4. Acqui sition The Company’s acquisitions have been accounted for in accordance with ASC Topic 805, Business Combinations, and the resulting goodwill and other intangible assets were accounted for under ASC Topic 350, Goodwill and Other Intangible Assets. Under business combination accounting, the assets and liabilities are generally recognized at their fair values and the difference between the consideration transferred, excluding transaction costs, and the fair values of the assets and liabilities is recognized as goodwill. The results of each business acquisition are included on the Consolidated Statements of Income from the date of the acquisition. Management’s assessment of qualitative factors affecting goodwill for each acquisition includes estimates of market share at the date of purchase, ability to grow in the market, synergy with existing Company operations and the payor profile in the markets. Gentiva Acquisition On December 2, 2024, the Company completed the Gentiva Acquisition. The purchase price was approximately $353.6 million, and is subject to the completion of working capital and related adjustments. The purchase was funded with the combination of a $233.0 million draw on the Company’s revolving credit facility and a portion of the net proceeds of the Public Offering. With the Gentiva Acquisition, the Company expanded its services within its personal care services segment in Arizona, Arkansas, California and North Carolina, and entered the market in Missouri and Texas. The home health segment also was expanded in Tennessee. The related acquisition and integration costs were $10.8 million and $1.0 million, respectively, for the year ended December 31, 2024. These costs are included in general and administrative expenses on the Consolidated Statements of Income and were expensed as incurred. Based upon management’s valuations, which are preliminary and subject to completion of working capital adjustments, the fair values of the assets and liabilities acquired are as follows:
|  | Total (Amounts in Thousands) |
Goodwill |  | $ | 309,898 |
Identifiable intangible assets |  |  | 28,600 |
Cash |  |  | 19 |
Accounts receivable |  |  | 24,715 |
Property and equipment |  |  | 1,112 |
Operating lease assets, net |  |  | 6,838 |
Other current assets |  |  | 71 |
Accounts payable |  |  | (1,555 | )
Accrued payroll |  |  | (5,648 | )
Operating lease liabilities, total |  |  | (6,386 | )
Deferred tax liabilities, net |  |  | (4,099 | )
Tota purchase price |  | $ | 353,565 |
Identifiable intangible assets acquired includ ed $4.9 million in a trade name, $23.0 million of definite-lived state licenses and $0.7 million of indefinite-lived state licenses. The preliminary estimated fair value of identifiable intangible assets was determined with the assistance of a valuation specialist, using Level 3 inputs as defined under ASC Topic 820. The fair value analysis and related valuations reflect the conclusions of management. All estimates, key assumptions, and forecasts were either provided by or reviewed by the Company. The goodwill and intangible assets acquired are deductible for tax purposes. The Gentiva Acquisition accounte d for $22.6 million of net service revenues and $3.1 million of operating income for the year ended December 31, 2024. Tennessee Quality Care On August 1, 2023, the Company completed the acquisition of Tennessee Quality Care. The purchase price was approximately $111.2 million, including the amount of acquired excess cash held by Tennessee Quality Care at the closing of the acquisition (approximately $2.4 million), and is subject to the completion of working capital and related adjustments. The Tennessee Quality Care acquisition was funded with a combination of a $110.0 million draw on the Company’s revolving credit facility and available cash. With the purchase of Tennessee Quality Care, the Company expanded its services within its hospice and home health segments to Tennessee. The related acquisition and integration costs were $2.1 million and $1.0 million, respectively, for the year ended December 31, 2023. These costs are included in general and administrative expenses on the Consolidated Statements of Income and were expensed as incurred. Based upon management’s valuations, the fair values of the assets and liabilities acquired are as follows:
|  | Total (Amounts in Thousands) |
Goodwill |  | $ | 79,346 |
Identifiable intangible assets |  |  | 26,740 |
Cash |  |  | 2,357 |
Accounts receivable |  |  | 5,940 |
Property and equipment |  |  | 307 |
Operating lease assets, net |  |  | 194 |
Other assets |  |  | 200 |
Accrued expenses |  |  | (1,407 | )
Accrued payroll |  |  | (2,368 | )
Long-term operating lease liabilities |  |  | (80 | )
Total purchase price |  | $ | 111,229 |
Identifiable intangible assets acquired includ ed $7.5 million in a trade name and $19.2 million of indefinite-lived state licenses. The preliminary estimated fair value of identifiable intangible assets was determined with the assistance of a valuation specialist, using Level 3 inputs as defined under ASC Topic 820. The fair value analysis and related valuations reflect the conclusions of management. All estimates, key assumptions, and forecasts were either provided by or reviewed by the Company. The goodwill and intangible assets acquired are deductible for tax purposes. The Tennessee Quality Care acquisition accounte d for $16.3 million of net service revenues and $3.0 million of operating income for the year ended December 31, 2023. JourneyCare On February 1, 2022, the Company completed the acquisition of the hospice and palliative operations of JourneyCare. The purchase price was approximately $86.6 million, including the amount of acquired excess cash held by JourneyCare at the closing of the acquisition (approximately $0.4 million) plus the finalization of net working capital payable to seller of $1.6 million. The JourneyCare acquisition was funded with a combination of a $35.0 million draw on the Company’s revolving credit facility and available cash. With the JourneyCare acquisition, the Company expanded its hospice services to patients in the state of Illinois. The related acquisition and integration costs were $0.5 million and $4.3 million, respectively, for the year ended December 31, 2022. These costs are included in general and administrative expenses on the Consolidated Statements of Income and were expensed as incurred. Based upon management’s valuations, the fair values of the assets and liabilities acquired are as follows:
|  | Total (Amounts in Thousands) |
Goodwill |  | $ | 69,446 |
Identifiable intangible assets |  |  | 13,792 |
Cash |  |  | 421 |
Accounts receivable |  |  | 7,747 |
Property and equipment |  |  | 1,194 |
Operating lease assets, net |  |  | 3,728 |
Other assets |  |  | 317 |
Accrued expenses |  |  | (5,002 | )
Accrued payroll |  |  | (1,511 | )
Long-term operating lease liabilities |  |  | (3,537 | )
Total purchase price |  | $ | 86,595 |
Identifiable intangible assets acquired included $9.0 million in a trade name and $4.8 million of indefinite-lived state licenses. The estimated fair value of identifiable intangible assets was determined with the assistance of a valuation specialist, using Level 3 inputs as defined under ASC Topic 820. The fair value analysis and related valuations reflect the conclusions of management. All estimates, key assumptions, and forecasts were either provided by or reviewed by the Company. The goodwill and intangible assets acquired are deductible for tax purposes. JourneyCare accounted for $47.2 million of net service revenues and $9.1 million of operating income for the year ended December 31, 2022. Other Acquisitions On March 9, 2024, we completed our acquisition of the operations of Upstate for $0.4 million, with funding provided by available cash. With the purchase of Upstate, the Company expanded its personal care services segment in South Carolina. On January 1, 2023, we completed the acquisition of CareStaff for approximately $1.0 million, with funding provided by available cash. With the purchase of CareStaff, the Company expanded its personal care services segment in Florida and recorded goodwill of $0.6 million. On October 1, 2022, we completed the acquisition of Apple Home for approximately $12.7 million, with funding provided by drawing on the Company’s revolving credit facility. The additional contingent consideration of up to approximately $2.0 million was settled without further payment. With the purchase of Apple Home, the Company expanded clinical services for its home health segment in Illinois and recorded goodwill of $8.9 million. For the year ended December 31, 2024, the following table contains unaudited pro forma Consolidated Income Statement information of the Company as if the Gentiva Acquisition closed on January 1, 2023. For the year ended December 31, 2023, the following table contains unaudited pro forma Consolidated Income Statement information of the Company as if the acquisition of Tennessee Quality Care closed on January 1, 2022. For the year ended December 31, 2022, the following table contains unaudited pro forma Consolidated Income Statement information of the Company as if the acquisition of JourneyCare closed on January 1, 2021.
|  | For the Years Ended December 31, (Amounts in Thousands, Unaudited) |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Net service revenues |  | $ | 1,412,031 |  |  | $ | 1,363,454 |  |  | $ | 991,566 |
Operating income from continuing operations |  |  | 138,998 |  |  |  | 129,103 |  |  |  | 73,353 |
Net income from continuing operations |  |  | 103,381 |  |  |  | 90,340 |  |  |  | 46,270 |
Net income per common share |  |  |  |  |  |  |  |  |
Basic income per share |  | $ | 6.08 |  |  | $ | 5.65 |  |  | $ | 2.92 |
Diluted income per share |  | $ | 5.95 |  |  | $ | 5.54 |  |  | $ | 2.86 |
The pro forma disclosures in the table above include adjustments for amortization of intangible assets, tax expense and acquisition costs to reflect results that are more representative of the combined results of the transactions. This pro forma information is presented for illustrative purposes only and may not be indicative of the results of operations that would have actually occurred. In addition, future results may vary significantly from the results reflected in the pro forma information. The unaudited pro forma financial information does not reflect the impact of future events that may occur after the acquisition, such as anticipated cost savings from operating synergies.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent + Details
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