Business Combinations

6 Months Ended

Jun. 30, 2012

Business Combinations

Note 4. Business Combinations

Lincare acquires the business and related assets of local and regional companies as an ongoing strategy to increase revenue within its respective markets. Lincare arrives at a negotiated purchase price taking into account such factors including, but not limited to, the acquired company’s historical and projected revenue growth, operating cash flow, product mix, payor mix, service reputation and geographical location.

During the six-month period ended June 30, 2012, the Company acquired the business of seven companies. During the six-month period ended June 30, 2011, the Company acquired the business of six companies.

The acquisition date fair value of the total consideration transferred for the 2012 acquisitions was $19.5 million, which consisted of the following:

	(In thousands)
Cash consideration, net of cash acquired	$	15,881
Deferred acquisition obligations		3,666
	$	19,547

The following table summarizes the fair values of the assets and liabilities assumed based on preliminary estimates that are subject to change during the subsequent twelve months upon completion of the final valuation analyses.

	(In thousands)
Current assets, net of cash acquired	$	860
Property and equipment		1,191
Intangible assets		60
Goodwill		17,774
Deferred revenue		(338	)
	$	19,547

The results of the 2012 acquisitions have been included in the Company’s financial statements from the acquisition date forward and were not significant for the first six months of 2012. Pro forma information for the comparable period of 2011 would not be materially different from amounts reported.