v3.26.3
Acquisitions
 9 Months Ended
Sep. 30, 2026
Acquisitions [Abstract]  
Acquisitions 16.    Acquisitions

On September 16, 2026, Roto-Rooter completed the acquisition of RotoCo, LLC (“RotoCo”), the largest independent Roto-Rooter franchise for $60.6 million using borrowings under Chemed’s existing $450.0 million revolving credit facility. The territories acquired include Northern San Diego, Palm Springs, Ventura, Bakersfield, Lancaster, Fresno, Monterey, Stockton, Manteca and Sacramento, California.

Other acquisitions completed in 2026 include the following: In the third quarter of 2026, Roto-Rooter completed one acquisition of a franchise in California for $1.9 million in cash. In the second quarter of 2026, Roto-Rooter completed two acquisitions, consisting of one franchise in New York and one franchise in Texas, for a total of $12.9 million in cash. In the first quarter of 2026, Roto-Rooter completed two acquisitions, consisting of one franchise in Texas and one franchise in California, for a total of $20.6 million in cash.


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The preliminary purchase price allocation for the acquired franchises are as follows (in thousands):

RotoCo, LLC

All Other 2026 Acquisitions

Total

Goodwill

$

56,650 

$

31,149 

$

87,799 

Property, plant and equipment

3,970 

687 

4,657 

Reacquired franchise rights

-

3,279 

3,279 

All other identifiable intangibles assets

-

525 

525 

Other assets and liabilities - net

-

(210)

(210)

$

60,620 

$

35,430 

$

96,050 

The purchase price allocation for RotoCo is preliminary and subject to adjustment during the measurement period. The Company is finalizing its evaluation of certain acquired assets, including reacquired franchise rights and other identifiable intangible assets, and the resulting goodwill. Based on information currently available, management does not expect the final valuation to materially affect the preliminary purchase price allocation. The Company expects to complete the evaluation in the fourth quarter of 2026.

The pro forma revenue and earnings for the Company for the three and nine months ended September 30, as if all the acquisitions made in 2026 were completed on January 1, 2025 are as follows (in thousands, except per share data):

Three months ended September 30,

Nine months ended September 30,

2026

2025

2026

2025

Service revenues and sales

$

702,024 

$

637,879 

$

2,064,470 

$

1,930,565 

Net income

$

72,009 

$

64,875 

$

207,636 

$

190,114 

Earnings per share

$

5.51 

$

4.51 

$

15.61 

$

13.08 

Diluted earnings per share

$

5.48 

$

4.50 

$

15.58 

$

13.00 

On January 3, 2025, Roto-Rooter completed the acquisition of one franchise in Michigan for $225,000 in cash. Revenue and net income from acquisitions made in 2025 are not material.

Goodwill is assessed for impairment on a yearly basis as of October 1. The primary factor that contributed to the purchase price resulting in the recognition of goodwill is operational efficiencies expected as a result of integrating the operations of the acquisitions into the organizational structure. All goodwill recognized is deductible for tax purposes.

Shown below is movement in Goodwill (in thousands):

VITAS

Roto-Rooter

Total

Balance at December 31, 2025

$

404,866

$

262,133

$

666,999

Business combinations

-

87,799

87,799

Foreign currency adjustments

-

(40)

(40)

Balance at September 30, 2026

$

404,866

$

349,892

$

754,758