3. ACQUISITIONS OF BUSINESSES

During the three months ended March 31, 2014, the Company acquired two individual clinic practices for an aggregate of $125,000 in cash. On March 31, 2014, the aggregate purchase price is included in Goodwill on the Consolidated Balance Sheet. Allocation of the purchase prices will be completed during 2014.

During 2013, the Company completed the following multi-clinic acquisitions of physical therapy practices:

		% Interest		Number of
Acquisition	Date	Acquired		Clinics

February 2013 Acquisition	February 28		72%	9
April 2013 Acquisition	April 30		50%	5
May 2013 Acquisition	May 24		80%	5
December 9, 2013 Acquisition	December 9		60%	12
December 13, 2013 Acquisition	December 13		90%	11

In addition to the five multi-clinic acquisitions detailed above, in 2013, the Company acquired three individual clinics in separate transactions.

The purchase price for the 72% interest in the February 2013 Acquisition was $4.3 million in cash and $400,000 in a seller note, that is payable in two principal installments totaling $200,000 each, plus accrued interest, in February 2014 and 2015. The purchase price for the 50% interest in the April 2013 Acquisition was $2.4 million in cash and $200,000 in a seller note, that is payable in two principal installments totaling $100,000 each, plus accrued interest, in April of 2014 and 2015. The purchase price for the 80% interest in the May 2013 Acquisition was $3.6 million in cash and $200,000 in a seller note, that is payable in two principal installments totaling $100,000 each, plus accrued interest, in May of 2014 and 2015. The purchase price for the 60% interest in the December 9, 2013 Acquisition was $1.7 million in cash. The purchase price for the 90% interest in the December 13, 2013 Acquisition was $35.5 million in cash and $500,000 in a seller note, that is payable in two principal installments totaling $250,000 each, plus accrued interest, in December 2014 and 2015.

On February 1, 2013, through a subsidiary, the Company acquired a 100% interest in a clinic for $5,000. On June 1, 2013, the Company acquired a 100% interest in a clinic for $95,000. On September 16, 2013, the Company acquired a 100% interest in a clinic for $130,000.

The purchase prices for the 2013 acquisitions have been preliminarily allocated as follows (in thousands):


Cash paid, net of cash acquired	$	46,628
Seller notes		1,300
Total consideration	$	47,928
Estimated fair value of net tangible assets acquired:
Total current assets	$	3,756
Total non-current assets		2,283
Total liabilities		(1,082	)
Net tangible assets acquired		4,957
Referral relationships		940
Non-competition agreements		400
Tradename		1,500
Goodwill		50,672
Fair value of non-controlling interest		(10,541	)
	$	47,928

The consideration for each transaction was agreed upon through arm’s length negotiations. Funding for the cash portion of the purchase price for the 2013 acquisitions was derived from proceeds under the Credit Agreement.

The results of operations of these acquisitions have been included in the Company’s consolidated financial statements since acquired.

For the two acquisitions which occurred in December, 2013, the purchase price plus the fair value of the non-controlling interest for those two acquisitions was allocated to the fair value of the assets acquired and liabilities assumed based on the preliminary estimates of the fair values at the acquisition date, with the amount exceeding the estimated fair values being recorded as goodwill. The Company is in the process of completing its formal valuation analysis to identify and determine the fair value of tangible and identifiable intangible assets acquired and the liabilities assumed. Thus, the final allocation of the purchase price may differ from the preliminary estimates used based on additional information obtained. Changes in the estimated valuation of the tangible and intangible assets acquired and the completion by the Company of the identification of any unrecorded pre-acquisition contingencies, where the liability is probable and the amount can be reasonably estimated, will likely result in adjustments to goodwill.

Except for the December 13, 2013 Acquisition, unaudited proforma consolidated financial information for acquisitions occurring in 2013 have not been included as the results were not material to current operations.

Unaudited proforma net revenue and net income from continuing operations for the Company as if the December 13, 2013 Acquisition occurred as of January 1, 2012 is as follows (in thousands, except per share data):

	Three Months
		Ended
		March 31, 2013

Net revenues		$	65,461
Net income attributable to common shareholders from continuing operations		$	4,033

Earnings per share:
Basic - net income attributable to common shareholders from continuing operations		$	0.33
Diluted - net income attributable to common shareholders from continuing operations		$	0.33

Shares used in computation:
Basic - net income attributable to common shareholders from continuing operations			12,129
Diluted - net income attributable to common shareholders from continuing operations			12,144