XML 30 R14.htm IDEA: XBRL DOCUMENT v3.24.0.1
ACQUISITIONS
12 Months Ended
Dec. 31, 2023
Business Combination and Asset Acquisition [Abstract]  
ACQUISITIONS ACQUISITIONS
The Company’s acquisition focus is to purchase or lease operations that are complementary to the Company’s current businesses, accretive to the Company’s business or otherwise advance the Company’s strategy. The results of all the Company’s independent operating subsidiaries are included in the Financial Statements subsequent to the date of acquisition. Acquisitions are accounted for using the acquisition method of accounting.

2023 Acquisitions

During the year ended December 31, 2023, the Company expanded its operations with the addition of three home health agencies, eight hospice agencies, two home care agencies, and two senior living communities. In connection with the addition of the two senior living communities, the Company entered into a new long-term “triple-net” lease. A subsidiary of the Company entered into a separate operations transfer agreement with the prior operator of each acquired operation as part of each transaction.

The fair value of assets for two home health agencies, eight hospice agencies, and two home care agencies acquired were mostly concentrated in goodwill and indefinite-lived intangible assets and as such, these transactions were classified as business combinations in accordance with ASC Topic 805, Business Combinations (“ASC 805”). The purchase price for the business combinations was $21,376, which primarily consisted of goodwill of $11,517, indefinite-lived intangible assets of $8,914 related to Medicare and Medicaid licenses, and equipment, other assets and accounts receivable of $1,026, less assumed liabilities of $81. The acquisitions contributed $10,549 in revenue and operating income of $280 during the year ended December 31, 2023. The Company anticipates that the total goodwill recognized will be fully deductible for tax purposes.

One home health agency acquired a Medicare license and was considered an asset acquisition. The fair value of the home health license acquired was $211 and was recorded in other indefinite-lived intangibles.

There were no material acquisition costs that were expensed related to the business combinations during the year ended December 31, 2023.

2022 Acquisitions

During the year ended December 31, 2022, the Company expanded its operations with the addition of three home health agencies, four hospice agencies, and one senior living community. In connection with the addition of the senior living community, the Company entered into a new long-term “triple-net” lease. A subsidiary of the Company entered into a separate operations transfer agreement with the prior operator of each acquired operation as part of each transaction.

The aggregate purchase price for the home health and hospice acquisitions was $10,130. The goodwill was primarily attributable to indefinite-lived intangible assets that do not qualify for separate recognition, and to synergies the Company expects to achieve related to the acquisition, which was allocated to the Company's operating segments which are its reporting units. Total goodwill recognized was fully deductible for tax purposes. There were no material acquisition costs that were expensed related to the business combination during the year ended December 31, 2022.

2021 Acquisitions
During the year ended December 31, 2021, the Company expanded its operations with the addition of five home health agencies, four hospice agencies, and two home care agencies. The aggregate purchase price for these acquisitions was $14,135. A subsidiary of the Company entered into a separate operations transfer agreement with the prior operator of each acquired operation as part of each transaction. The goodwill was primarily attributable to intangible assets that do not qualify for separate recognition and to synergies the Company expects to achieve related to the acquisition and was allocated to the Company's operating segments which are its reporting units. Total goodwill recognized was fully deductible for tax purposes. Acquisition costs related to the business combinations of home health, hospice, and home care acquisitions of $80 were expensed related to the business combinations during the year ended December 31, 2021.

Two of the hospice agencies were acquired Medicare licenses and were considered asset acquisitions. The fair value of assets for the hospice licenses acquired totaled $585 and was allocated to indefinite-lived intangible assets.

The fair value of assets for home health and hospice acquisitions was mostly concentrated in goodwill and as such, these transactions were classified as business combinations in accordance with ASC 805. The table below presents the allocation of the purchase price for the operations acquired in acquisitions during the years ended December 31, 2023, 2022 and 2021 as noted above:

December 31,
202320222021
Equipment, furniture, and fixtures$34 $188 $62 
Goodwill11,517 5,232 7,821 
Other indefinite-lived intangible assets8,914 4,887 6,242 
Intangible assets— 10 — 
Other assets992 — 10 
Liabilities assumed(81)(187)— 
    Total acquisitions$21,376 $10,130 $14,135 
Less: cash paid in prior year (held in escrow)(a)
— — (585)
Total cash paid for acquisitions$21,376 $10,130 $13,550 
(a)
Total cash paid for acquisitions for the year ended December 31, 2021 includes $585 as an escrow deposit that was paid in the prior year.

Subsequent Events
On January 1, 2024, the Company announced it closed on a home health joint venture with John Muir Health (“Muir”), a leading nonprofit integrated health system serving communities throughout the east bay region of San Francisco, California. The transaction, which combines certain assets and the operations of Muir’s home health business and the assets and operations of a local Pennant-affiliated home health agency, will be majority-owned and managed by an independent operating subsidiary of the Company and provide home health services to patients throughout the San Francisco east bay region. Along with the assets contributed by a local Pennant-affiliated home health agency, the Company paid Muir $11,780 for a majority interest in the joint venture.