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
On April 8, 2025, the Company entered into the Arizona market through the acquisition of Privia Medical Group Arizona (“PMG AZ”), whereby Privia acquired a 51% ownership interest in PMG AZ. The acquisition was accounted for using the acquisition method pursuant to the requirements of ASC 805. The results of operations of the acquisition have been included in the Company’s consolidated financial statements since the date of acquisition.
The preliminary fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in thousands):
Cash
$5,942 
Accounts receivable
6,319 
Identifiable intangible assets:
Payer contract and physician network intangibles64,400 
Goodwill30,600 
Accounts payable
(12,261)
Total acquired net assets$95,000 
Information regarding the net cash paid for the acquisition is as follows (in thousands):
Fair value of assets acquired, net of $5.9 million of cash acquired
$70,719 
Accounts payable
(12,261)
Goodwill30,600 
Net cash paid for acquisition
$89,058 

Pro Forma Total Revenues

PMG AZ contributed revenue of $17.7 million from the date of acquisition through June 30, 2025. The following table summarizes the unaudited pro forma total revenues of the combined entity had the date of the acquisition been January 1, 2024:
For the Three Months Ended June 30,For the Six Months Ended June 30,
(Dollars in Thousands)2025202420252024
Pro forma combined entity total revenue
$521,153 $440,128 $1,019,580 $873,173 
The goodwill relating to the acquisition is primarily attributable to synergies related to the assembled workforce. Goodwill is measured as the excess of the consideration transferred over the fair value of assets acquired and liabilities assumed on the acquisition date. In connection with the acquisition, the seller is entitled to additional amounts up to a maximum value of $25.0 million, subject to meeting certain future targets. Of the $25.0 million, $10.0 million may be earned over a three-year period beginning at the acquisition date, and $15.0 million may be earned upon renewal of certain agreements in 2030. The Company accounted for these additional amounts as post combination expense and expects to recognize any amounts earned within General and administrative expenses in the consolidated statements of operations and Accounts payable and accrued expenses and Other non-current liabilities, for current and long-term liabilities, respectively, within the consolidated balance sheet. For the 2025 acquisition, 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 June 30, 2025 based on additional information obtained and completion of the valuation of the identifiable intangible assets. The Company does not expect any adjustments, if necessary, to be material.