v3.26.1
Note 3 - Acquisition of Five Skilled Nursing Facilities
 6 Months Ended
Jun. 30, 2026
Notes to Financial Statements  
Business Combination [Text Block]

Note 3 – Acquisition of Five Skilled Nursing Facilities

 

On June 1, 2026, the Company purchased the land, buildings, and other specified assets and assumed certain liabilities of five skilled nursing facilities from National Health Corporation (“National”) for a purchase price of $50,500,000. National is considered an affiliate and related party and provides payroll services to NHC. The operations have 639 licensed skilled nursing beds in the states of South Carolina and Tennessee. The acquisition represents both an expansion of NHC’s operations into these states and a strategic advancement of its growth in its existing operational footprint. 

 

The Company utilized widely accepted income-based, market-based, and cost-based valuation approaches to perform the preliminary purchase price allocation.

 

The Company has performed a preliminary valuation analysis of the fair market value of the assets acquired and liabilities assumed from National. The final valuation of the assets acquired and liabilities assumed was not complete as of June 30, 2026, but will be finalized within the allowable measurement period. The following table summarizes the allocation of the preliminary purchase price as of the transaction’s closing date (in thousands):

 

  

Amount

 

Accounts receivable

 $6,262 

Inventory

  338 

Prepaid expenses and other assets

  747 

Property and equipment

  51,091 

Deposits and other assets

  (24)

Intangible assets

  500 

Total assets acquired

  58,914 
     

Trade accounts payable

  1,729 

Accrued payroll

  3,285 

Other current liabilities

  1,702 

Total liabilities assumed

  6,716 
     

Total estimated fair value of the acquisition

 $52,198 

 

The indefinite-lived intangible assets acquired include the skilled nursing certificates of need and licenses.

 

The operations added during the three and six months ended June 30, 2026 were not material to the Company. Accordingly, pro-forma financial information is not presented. As of June 30, 2026, these additions have been included in the interim condensed consolidated balance sheet of the Company. The operating results have been included in the interim condensed consolidated statements of operations since the date the Company gained effective control, which was June 1, 2026.

 

For the three and six months ended June 30, 2026, these five skilled nursing facilities contributed net operating revenues of $6,002,000 and income before income taxes of $608,000.