v3.25.2
Business Combinations
 6 Months Ended
Jun. 30, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Business Combinations Business Combinations
During the six months ended June 30, 2025, we completed the following acquisition which was not individually material to our financial position, results of operations, or cash flows. The acquisition was made to enhance our position and ability to provide inpatient rehabilitation services to patients in the applicable geographic area.
•In May 2025, we acquired 51% of the operations of a 54-bed inpatient rehabilitation unit in Fort Myers, Florida when Lee Healthcare Holdings, LLC contributed those operations to our existing joint venture.
We accounted for this transaction under the acquisition method of accounting and reported the results of operations of the acquired unit from the date of acquisition. Assets acquired were recorded at their estimated fair values as of the acquisition date. The estimated fair value of the noncompete intangible asset was based on an income approach using discounted cash flow techniques. The aforementioned income method utilizes management’s estimates of future operating results and cash flows discounted using a weighted-average cost of capital. The excess of the fair value of the consideration conveyed over the fair value of the assets acquired was recorded as goodwill. The goodwill reflects our expectations of our ability to gain access to and penetrate the acquired unit’s historical patient base and the benefits of being able to leverage operational efficiencies with favorable growth opportunities based on positive demographic trends in this market. None of the goodwill recorded as a result of this transaction is deductible for federal income tax purposes.
The fair values recorded were based upon a preliminary valuation. Estimates and assumptions used in such valuation are subject to change, which could be significant, within the measurement period (up to one year from the acquisition date). The primary areas of the preliminary valuation that are not yet finalized relate to the fair value of amounts for the intangible asset and the final amount of residual goodwill. We expect to continue to obtain information to assist us in determining the fair value of the net assets acquired at the acquisition date during the measurement period.
The fair value of the assets acquired at the acquisition dates were as follows (in millions):
Identifiable intangible asset: 
Noncompete agreement (useful life of 2 years)
$0.5 
Goodwill19.0 
Total assets acquired$19.5 
Information regarding the net cash paid for the acquisitions during each period presented is as follows (in millions):
Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
Fair value of assets acquired$0.5 $5.8 $0.5 $5.8 
Goodwill19.0 2.7 19.0 2.7 
Fair value of noncontrolling interest owned by joint venture partner(19.5)(8.5)(19.5)(8.5)
Net cash paid for acquisitions$— $— $— $— 
The pro forma effects of the above mentioned acquisition on our results of operations for periods prior to the respective acquisition date were not material.