v3.26.1
Acquisition
 6 Months Ended
Jul. 04, 2026
Business Combination [Abstract]  
Acquisition

4. ACQUISITION

 

On March 9, 2026, Pediatric Services of America, LLC, a subsidiary of the Company, entered into an Equity Interest Purchase Agreement (the "Purchase Agreement") to acquire 100% of the equity interests in Family First Holding, LLC ("Family First") for a purchase price of $175.5 million, subject to customary adjustments for working capital and other items (the "Acquisition"). Family First provides pediatric home care across seven states including Florida and Texas.

 

On June 1, 2026, the Company paid approximately $173.7 million in cash as consideration, after customary adjustments for working capital and other items, upon the closing of the Acquisition. The Company funded the Acquisition with cash on hand.

The Purchase Agreement provides for customary purchase price adjustments, and $10.8 million of cash held in escrows for various periods up to 24 months following the closing to support obligations under the Purchase Agreement.

 

The preliminary purchase price allocation as of the acquisition date, reflecting measurement period adjustments made during the respective period, is as follows (amounts in thousands):

 

Entity

Family First

 

Acquisition Date

June 1, 2026

 

Cash consideration

$

173,734

 

 

 

 

Cash and cash equivalents

$

4,291

 

Patient accounts receivable

 

10,698

 

Other identifiable assets and liabilities, net

 

(5,869

)

Intangible assets - licenses

 

7,250

 

Intangible assets - trade names

 

1,150

 

Total identifiable net assets

 

17,520

 

Goodwill

 

156,214

 

Total

$

173,734

 

 

The purchase price allocation is preliminary pending a final analysis of the impact of income taxes and finalization of the fair value of intangible assets and net working capital. Acquired trade names are amortized over a 1-year useful life and licenses are classified as indefinite-lived intangible assets. The preliminary goodwill recognized is attributable to the excess of the particular purchase price of the Acquisition over the fair value of identifiable net assets acquired, including other identified intangible assets. Goodwill is primarily attributable to expected synergies resulting from the Acquisition. Preliminary goodwill of $156.2 million is expected to be deductible for income tax purposes.

 

On June 2, 2025, the Company, Thrive Skilled Pediatric Care, LLC, a Delaware limited liability company (“Thrive”), and other parties thereto completed a Plan of Merger (the “Merger Agreement”), in which Thrive became a wholly-owned subsidiary of the Company (collectively, the “Merger”). The Company paid approximately $75.7 million as consideration in cash and common stock. The final purchase price allocation, reflecting measurement period adjustments made during the subsequent periods are as follows (amounts in thousands):

 

Entity

Thrive

 

Acquisition Date

June 2, 2025

 

Cash consideration

$

15,855

 

Share-based consideration

 

59,838

 

Total

$

75,693

 

 

 

 

Cash and cash equivalents

$

1,002

 

Patient accounts receivable

 

18,306

 

Other identifiable assets and liabilities, net

 

(14,408

)

Intangible assets - licenses

 

5,000

 

Intangible assets - trade names

 

540

 

Total identifiable net assets

 

10,440

 

Goodwill

 

65,253

 

Total

$

75,693

 

 

Preliminary goodwill and measurement adjustments were allocated to segments as follows (amounts in thousands):

 

 

PDS

 

 

HHH

 

 

MS

 

 

Total

 

Balance at January 3, 2026 , net (1)

$

964,218

 

 

$

46,188

 

 

$

110,636

 

 

$

1,121,042

 

Addition

 

156,214

 

 

 

-

 

 

 

-

 

 

 

156,214

 

Measurement period adjustments

 

(1,237

)

 

 

-

 

 

 

-

 

 

 

(1,237

)

Balance at July 4, 2026, net (1)

$

1,119,195

 

 

$

46,188

 

 

$

110,636

 

 

$

1,276,019

 

 

(1) Goodwill balance is net of accumulated impairment losses of $608.0 million for PDS, $119.8 million for MS, and $487.4 million for HHH.

 

The Company incurred transaction costs of $4.4 million and $7.5 million during the three and six-month periods ended July 4, 2026, respectively primarily related to the Acquisition. These costs are included in acquisition-related costs in the interim unaudited consolidated statement of operations. Acquisition-related costs during the three and six-month periods ended June 28, 2025 of $3.4 million and $3.5 million, respectively, primarily relate to the previous acquisition of Thrive, completed on June 2, 2025.

 

Pro forma financial information related to the above acquisitions has not been provided as the transactions were determined to not be significant to the Company in accordance with Regulation S-X. The results of operations following the acquisition of Family First on June 1, 2026 are included in the Company’s consolidated results of operations for the three and six-month periods ended July 4, 2026. The results of operations following the acquisition of Thrive on June 2, 2025 are included in the Company's consolidated results of operations for the three and six-month periods ended July 4, 2026 and June 28, 2025.