3. Acquisitions of Businesses

During 2015, 2014 and 2013, the Company completed the following multi-clinic acquisitions of physical therapy practices:

Acquisition	Date	% Interest Acquired			Number of Clinics
	2015
January 2015 Acquisition	January 31		60	%		9
April 2015 Acquisition	April 30		70	%		3
June 2015 Acquisition	June 30		70	%		4
December 2015 Acquisition	December 31		59	%		4

	2014
April 2014 Acquisition	April 30, 2014		70	%		13
August 2014 Acquisition	August 1, 2014		100	%		3

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

In addition to the multi-clinic acquisitions detailed above, the Company acquired a 60% interest in an individual clinic practice during 2015, the Company acquired four individual clinics in separate transactions during 2014 and the Company acquired three individual clinics in separate transactions during 2013.

On December 31, 2015, the Company acquired a 59% interest in a four-clinic physical therapy practice. The purchase price was $4.6 million in cash and $400,000 in seller notes payable that are payable in two principal installments of an aggregate of $200,000 each, plus accrued interest, in December 2016 and 2017. On June 30, 2015, the Company acquired a 70% interest in a four-clinic physical therapy practice. The purchase price was $3.6 million in cash and $0.7 million in seller notes that are payable plus accrued interest, in June 2018. On April 30, 2015, the Company acquired a 70% interest in a three-clinic physical therapy practice. The purchase price was $4.7 million in cash and $150,000 in a seller note that is payable in two principal installments of $75,000 each, plus accrued interest, in April 2016 and 2017. On January 31, 2015, the Company acquired a 60% interest in a nine-clinic physical therapy practice. The purchase price for the 60% interest was $6.7 million in cash and $0.5 million in a seller note that is payable in two principal installments of $250,000 each, plus accrued interest, in January 2016 and 2017. In addition to the multi-clinic acquisitions, on August 31, 2015, the Company acquired a 60% interest in a single physical therapy clinic for $150,000 in cash and $50,000 in a seller note payable that is payable plus accrued interest in August 2016.

The purchase prices for the 2015 acquisitions have been preliminarily allocated as follows (in thousands):

Cash paid, net of cash acquired	$	18,965
Seller notes		1,800
Total consideration	$	20,765
Estimated fair value of net tangible assets acquired:
Total current assets	$	2,146
Total non-current assets		1,404
Total liabilities		(1,036	)
Net tangible assets acquired	$	2,514
Referral relationships		3,069
Non-compete		731
Tradename		3,315
Goodwill		23,428
Fair value of non-controlling interest		(12,292	)
	$	20,765

The purchase price for the 70% interest in the April 2014 Acquisition was $10.6 million in cash and a $400,000 seller note, that is payable in two principal installments totaling $200,000 each, plus accrued interest, in April 2015 and 2016. The purchase price for the August 2014 Acquisition was $1.0 million in cash. In addition, during 2014, the Company acquired three individual clinic practices for an aggregate of $595,000.

The purchase prices for the 2014 acquisitions have been allocated as follows:

Cash paid, net of cash acquired	$	12,270
Seller notes		400
Total consideration	$	12,670
Estimated fair value of net tangible assets acquired:
Total current assets	$	1,213
Total non-current assets		1,051
Total liabilities		(406	)
Net tangible assets acquired	$	1,858
Referral relationships		280
Non-compete		330
Tradename		1,600
Goodwill		13,327
Fair value of non-controlling interest		(4,725	)
	$	12,670

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 was payable in two principal installments totaling $200,000 each, plus accrued interest, in February 2014 and 2015, which has been paid in full. 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 was payable in two principal installments totaling $100,000 each, plus accrued interest, in April of 2014 and 2015, which has been paid in full. 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 was payable in two principal installments totaling $100,000 each, plus accrued interest, in May of 2014 and 2015, which has been paid in full. 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 was payable in two principal installments totaling $250,000 each, plus accrued interest, in December 2014 and 2015, which has been paid in full. The aggregate purchase price for the three individual clinic practices acquired in 2013 was $238,000.

The purchase prices for the acquisitions in 2013 were 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	$	3,177
Total non-current assets		1,541
Total liabilities		(538	)
Net tangible assets acquired	$	4,180
Referral relationships		6,140
Non-compete		1,080
Tradename		3,700
Goodwill		43,369
Fair value of non-controlling interest		(10,541	)
	$	47,928

The purchase prices plus the fair value of the non-controlling interests for the acquisitions in January 2015 and in 2014 and 2013 were allocated to the fair value of the assets acquired, inclusive of identifiable intangible assets, i.e. trade names, referral relationships and non-compete agreements, and liabilities assumed based on the fair values at the acquisition date, with the amount exceeding the fair values being recorded as goodwill. For the other acquisitions in 2015, 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 at December 31, 2015 based on additional information obtained and completion of the valuation of the identifiable intangible assets. Changes in the estimated valuation of the tangible assets acquired, the completion of the valuation of identifiable intangible assets 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.

For the acquisitions in January 2015 and in 2014 and 2013, the values assigned to the referral relationships and non-compete agreements are being amortized to expense equally over the respective estimated lives. For referral relationships, the range of the estimated lives was 4½ to 13 years, and for non-compete agreements the estimated lives was six years. Generally, the values assigned to tradenames are tested annually for impairment, however with regards to one acquisition in 2013, the tradename is being amortized over the term of the six year agreement in which the Company has acquired the rights to use the specific tradename. The values assigned to goodwill are tested annually for impairment.

For the 2015, 2014 and 2013 acquisitions, total current assets primarily represent primarily patient accounts receivable. Total non-current assets are fixed assets, primarily equipment, used in the practices.

The consideration paid for each of the acquisitions was derived through arm’s length negotiations. Funding for the cash portions was derived from proceeds from the Company’s revolving credit facility. The results of operations of the acquisitions have been included in the Company’s consolidated financial statements since their respective date of acquisition. Unaudited proforma consolidated financial information for the acquisitions in 2015, 2014, with the exception of the December 13, 2013 Acquisition (previously disclosed), and 2013 acquisitions have not been included as the results, individually and in the aggregate, were not material to current operations.