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Business Combinations, Asset Acquisitions, and Goodwill | 12 Months Ended
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Dec. 31, 2024
Business Combination and Asset Acquisition [Abstract] |
Business Combinations, Asset Acquisitions, and Goodwill | 3. Business Combinations, Asset Acquisitions, and Goodwill 2024 Acquisitions DWGAS, Inc. (“DWGAS”) On December 31, 2024, the Company converted its loan receivable with DWGAS to acquire certain assets of a subsidiary of DWGAS (see Note 7—“Loan Receivable and Loan Receivable—Related Parties”), which is accounted for as a business combination. The acquisition provides the Company with a provider network in the Hawaii market. The purchase price consisted of the outstanding principal and unpaid interest of the loan. Collaborative Health Systems, LLC (“CHS”) On October 4, 2024, the Company and its affiliated professional entity acquired all of the outstanding membership interest relating to Collaborative Health Systems, LLC, Golden Triangle Physician Alliance, and Heritage Physician Networks (collectively, “CHS”). CHS partners with independent providers in caring for over 129,000 Medicare members across 17 states. CHS provides comprehensive support for its physician partners by providing management services, risk contracting, and population health capabilities, including actionable data and other tools, to deliver care coordination and closure of gaps in care. CHS provides additional services to secure and deliver favorable value-based contracts with commercial and other health plans. Total consideration for the acquisition was $47.5 million, consisting of $35.3 million cash funded upon the close date, $6.9 million due to the seller based on estimated working capital adjustments, contingent consideration fair valued at $5.2 million, and $0.1 million of replacement restricted stock awards. The con sideration is subject to changes based on working capital adjustments, which are settled December 31 of the year following the year in which the closing occurs as per the purchase agreement. See Note 21—“Fair Value Measurements of Financial Instruments” for additional information on contingent consideration. Airline Complete Healthcare of Texas, Ltd. (“Airline Complete”) On July 1, 2024, the Company, through its consolidated VIE, purchased 100% of the equity interest in Airline Complete. Airline Complete is a primary care clinic located in Texas. The purchase price consisted of cash funded on July 1, 2024. Advanced Health Management Systems, L.P. (“AHMS”) On March 31, 2024, the Company, through its wholly owned subsidiary, purchased all of the outstanding general and limited partnership interests of AHMS. AHMS’s wholly owned subsidiary operates a Restricted Knox-Keene licensed health plan in Los Angeles, California. Total consideration for the acquisition was $60.9 million, consisting of $63.9 million cash funded upon the close date and $3.0 million due from the seller based on estimated working capital adjustments. The consideration is subject to changes based on working capital adjustments, which are settled within one year from the close date as per the purchase agreement. Prime Community Care of Central Valley, Inc. (“PCCCV”) On March 29, 2024, the Company, through its consolidated VIE, acquired certain assets of PCCCV, a professional medical corporation that operates in Central California. Total consideration of the acquisition was approximately $10.5 million, consisting of cash funded upon the close date and contingent consideration fair valued at $2.5 million on the date of acquisition (“PCCCV contingent consideration”). See Note 21—“Fair Value Measurements of Financial Instruments” for additional information on contingent consideration. Community Family Care Medical Group IPA, Inc. (“CFC”) On January 31, 2024, the Company, through its consolidated VIE, acquired certain assets of CFC. CFC is an RBO that manages the healthcare of members in the Los Angeles, California, area. The group serves patients across Medicare, Medicaid, and Commercial payers. At December 31, 2024, the total consideration for the purchase was $121.0 million, consisting of $91.0 million cash funded upon the close date as per the purchase agreement, $22.0 million of the Company’s common stock, resulting in the issuance of 631,712 shares of common stock, and contingent consideration with a fair value of $8.0 million on the date of acquisition (“CFC contingent consideration”). See Note 21—“Fair Value Measurements of Financial Instruments” for additional information on contingent consideration. Advanced Diagnostic and Surgical Center, Inc. (“ADSC”) On January 1, 2024, the Company acquired 95% of the equity interest of ADSC. ADSC is a diagnostic and surgical center that also provides ambulatory surgery services. The total consideration consisted of cash funded upon the close of the transaction and contingent consideration with a fair value of $3.6 million on the date of acquisition (“ADSC contingent consideration”). See Note 21—“Fair Value Measurements of Financial Instruments” for additional information on contingent consideration. The Company is in the process of finalizing the purchase price allocation for CHS and AHMS as a result of the purchase price not being finalized. Therefore, the balances are subject to change as a result of any working capital adjustments, primarily for finalization of medical liabilities and CHS’ participation in government savings programs for the 2024 performance year. The following table summarizes the purchase price allocation of the fair value of assets acquired and liabilities assumed related to each acquisition at the acquisition date for acquisitions that closed during the year ended December 31, 2024 (in thousands):
|  | CHS |  |  | AHMS |  |  | CFC |  |  | Others* |  |  | Net Total |
Total purchase consideration: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash paid |  | $ | 35,322 |  |  | $ | 63,935 |  |  | $ | 90,998 |  |  | $ | 15,000 |  |  | $ | 205,255 |
Purchase price due to (from) seller |  |  | 6,944 |  |  |  | (2,995 | ) |  |  | — |  |  |  | — |  |  |  | 3,949 |
Contingent consideration |  |  | 5,154 |  |  |  | — |  |  |  | 8,026 |  |  |  | 6,161 |  |  |  | 19,341 |
Common stock issued and replacement awards |  |  | 118 |  |  |  | — |  |  |  | 21,952 |  |  |  | — |  |  |  | 22,070 |
Conversion of promissory note |  |  |  |  |  | — |  |  |  | — |  |  |  | 5,175 |  |  |  | 5,175 |
|  | $ | 47,538 |  |  | $ | 60,940 |  |  | $ | 120,976 |  |  | $ | 26,336 |  |  | $ | 255,790 |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 4,556 |  |  | $ | 33,950 |  |  | $ | 16,674 |  |  | $ | 3,515 |  |  | $ | 58,695 |
Investment in marketable securities |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 30 |  |  |  | 30 |
Receivables |  |  | 87,416 |  |  |  | 11,007 |  |  |  | 6,530 |  |  |  | — |  |  |  | 104,953 |
Other receivables |  |  | 54,194 |  |  |  | — |  |  |  | 472 |  |  |  | — |  |  |  | 54,666 |
Prepaid expenses and other current assets |  |  | 357 |  |  |  | 36 |  |  |  | 2,902 |  |  |  | 11 |  |  |  | 3,306 |
Property and equipment, net |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 823 |  |  |  | 823 |
Intangible assets |  |  | 14,200 |  |  |  | 23,600 |  |  |  | 28,000 |  |  |  | 6,338 |  |  |  | 72,138 |
Goodwill |  |  | 12,151 |  |  |  | 25,731 |  |  |  | 83,571 |  |  |  | 16,357 |  |  |  | 137,810 |
Income tax receivable |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1 |  |  |  | 1 |
Investments in other entities – equity method |  |  | 3,125 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3,125 |
Restricted cash |  |  | — |  |  |  | 300 |  |  |  | — |  |  |  | — |  |  |  | 300 |
Total assets acquired |  | $ | 175,999 |  |  | $ | 94,624 |  |  | $ | 138,149 |  |  | $ | 27,075 |  |  | $ | 435,847 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable and accrued expenses |  | $ | 68,115 |  |  | $ | 13,001 |  |  | $ | 2,486 |  |  | $ | 303 |  |  | $ | 83,905 |
Medical liabilities |  |  | 60,424 |  |  |  | 14,253 |  |  |  | 14,663 |  |  |  | — |  |  |  | 89,340 |
Income taxes payable |  |  | — |  |  |  | — |  |  |  | 24 |  |  |  | — |  |  |  | 24 |
Deferred tax liability |  |  | — |  |  |  | 6,430 |  |  |  | — |  |  |  | 8 |  |  |  | 6,438 |
Non-controlling interest |  |  | (78 | ) |  |  | — |  |  |  | — |  |  |  | 428 |  |  |  | 350 |
Total liabilities assumed |  | $ | 128,461 |  |  | $ | 33,684 |  |  | $ | 17,173 |  |  | $ | 739 |  |  | $ | 180,057 |
Total net assets acquired |  | $ | 47,538 |  |  | $ | 60,940 |  |  | $ | 120,976 |  |  | $ | 26,336 |  |  | $ | 255,790 |
*Others consist of estimated fair values of the assets acquired, net of cash acquired, related to ADSC, PCCCV, Airline Complete, and DWGAS. Following the acquisition dates, the operating results have been included in the consolidated financial statements. For the period from the acquisition dates through December 31, 2024, the total revenue and net income of all acquisitions closed in 2024, in the aggregate, were $531.2 million and $27.8 million, respectively. 2023 Acquisitions Texas Independent Providers, LLC (“TIP”) On September 1, 2023, the Company acquired certain assets relating to TIP. The acquired assets allow the Company to provide high-quality care services to Medicare Advantage patients in Texas. The purchase price consisted of cash funded on September 1, 2023. For Your Benefit, Inc. (“FYB”) On May 1, 2023, the Company acquired 100% of the equity interest in FYB. FYB is licensed by the California Department of Managed Health Care as a full-service Restricted Knox-Keene licensed health plan to serve Medicare Advantage members only in designated California counties. As a Restricted Knox-Keene licensed health plan, FYB is not permitted to market directly to Medicare beneficiaries, but rather, contracts with “upstream” Medicare Advantage payer plans on a “global capitation” basis, which enables FYB to assume full financial responsibility, including both professional and institutional risk, for the medical costs of its Medicare Advantage members under the Knox-Keene Health Care Service Plan Act of 1975. Chinese Community Health Care Association (“CCHCA”) On March 1, 2023, the Company acquired certain healthcare assets from CCHCA. The acquired assets allow the Company to provide high-quality care to more patients in the San Francisco Community. The purchase price consisted of cash funded on May 1, 2023. Unaudited Pro Forma Financial Information The pro forma financial information in the table below presents the combined results of the Company and the acquisitions in 2024 as if the acquisitions had occurred on January 1, 2023. The pro forma information presented is shown for illustrative purposes only and is not necessarily indicative of future results of operations of the Company or results of operations of the Company that would have actually occurred had the transactions been in effect for the periods presented.
|  | For the Years Ended December 31, |
(in thousands, except per share amounts) |  | 2024 |  |  | 2023 |
Total revenue |  | $ | 2,732,932 |  |  | $ | 2,655,460 |
Net income attributable to Astrana Health, Inc. |  | $ | 20,885 |  |  | $ | 57,381 |
Net income per share – basic |  | $ | 0.44 |  |  | $ | 1.23 |
Net income per share – diluted |  | $ | 0.44 |  |  | $ | 1.22 |
The acquisitions were accounted for under the acquisition method of accounting. The fair value of the consideration for the acquired companies was allocated to acquired tangible and intangible assets and liabilities based upon their fair values. The excess of the purchase consideration over the fair value of the net tangible and identifiable intangible assets acquired was recorded as goodwill. Factors leading to goodwill being recognized are the Company’s expectation of synergies from combining operations of entities acquired and the Company, as well as the value of intangible assets that are not separately recognized, such as assembled workforce. Of the total goodwill recognized from the acquisitions that closed in 2024, $130.8 million was assigned to the Care Partners segment $7.0 million was assigned to the Care Delivery segment, and no goodwill was assigned to the Care Enablement segment. The determination of the fair value of assets and liabilities acquired requires the Company to make estimates and use valuation techniques when market value is not readily available. Transaction costs associated with business acquisitions are expensed as they are incurred. For the year ended December 31, 2024, the Company incurred $3.0 million in transaction costs for acquisitions closed in 2024. At the time of acquisition, the Company estimates the amount of the identifiable intangible assets based on a valuation and the facts and circumstances available at the time. The Company determines the final value of the identifiable intangible assets as soon as information is available, but not more than one year from the date of acquisition. The total amount of goodwill that is expected to be deductible for tax purposes is $105.1 million for acquisitions closed in 2024. The Company had no impairment of i ts goodwill or indefinite-lived intangible assets for the years ended December 31, 2024, 2023 and 2022. The change in the carrying value of goodwill for the years ended December 31, 2024 and 2023 was as follows (in thousands):
|  | Amount |
Balance at January 1, 2023 |  | $ | 269,053 |
Acquisitions |  |  | 7,866 |
Adjustments |  |  | 1,912 |
Balance at December 31, 2023 |  |  | 278,831 |
Acquisitions |  |  | 137,810 |
Adjustments |  |  | 2,612 |
Balance at December 31, 2024 |  | $ | 419,253 |

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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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