Annual report pursuant to Section 13 and 15(d)

Business Combinations

v3.6.0.2
Business Combinations
 12 Months Ended
Dec. 31, 2015
Business Combinations [Abstract]  
Business Combinations
4. Business Combinations

Acquisitions Accounted for Using the Purchase Method

On April 20, 2015 (the “Closing Date”), the Company acquired substantially all of the assets of Ciscura for $6.2 million in cash, based on the final number of pumps acquired and the associated treatments, which were generated during the 90-day period post-closing from the approximately 100 medical facility relationships Ciscura had prior to the acquisition. The Company acquired approximately 1,800 infusion pumps, its four-person field sales team, as well as its facilities management personnel, which have become the foundation of the Company’s new Southeast facility. Ciscura, based in Alpharetta, GA, was a privately-held Southeastern regional provider of ambulatory infusion pumps and services to medical facilities and will provide the Company with a new regional warehouse and service facility that will be in close proximity to a number of our largest existing customers, in addition to new customers previously serviced by Ciscura, enabling same day service for equipment and supplies to much of the Southeast region. The Company used available borrowings under our Credit Facility to finance the acquisition and associated expenses. As of December 31 2015, $6.2 million of the purchase price was paid in cash and approximately $0.7 million for integration, professional and other related expenses were expensed as incurred and are included in General and Administrative expenses in the Company’s consolidated statements of operations. The Company did not disclose the revenue and income of Ciscura for the period from the acquisition date through December 31, 2015 as it was not practical due to the fact that the operations were substantially integrated. See Note 8 – Debt for additional information pertaining to this funding.

Final Purchase Price Allocation

Pursuant to ASC 805, “Business Combinations,” the final purchase price was allocated to the assets acquired and liabilities assumed based upon their fair values as of the Closing Date. The final purchase price allocation was primarily based upon a valuation using income and cost approaches and management’s estimates and assumptions. The allocation of the final purchase price to the fair values of the assets acquired and liabilities assumed as of the Closing Date is presented below (in thousands):

 

     Amount  

Medical equipment in rental service

    $ 2,289   

Trade names and Trademarks

      23   

Customer relationships

      3,393   

Furniture and fixtures

      20   

Leasehold improvements

      185   

Non-competition agreements

      246   
  

 

 

  

Total - final purchase price

    $ 6,156   
  

 

 

  

Acquired property and equipment are being depreciated on a straight-line basis with estimated remaining lives ranging from 1 year to 7 years.

Unaudited Pro Forma Financial Information

The following summary pro forma condensed consolidated financial information is based on the assumption that the acquisition of Ciscura occurred on January 1, 2014 (in thousands) for purposes of the statement of operations:

 

     2015
Pro-Forma
(Restated)		      2014
Pro-Forma		  

Net revenue

    $ 71,755       $ 69,684   

Net income

    $ 2,854       $ 3,664   

The pro forma financial information presented also includes the pro forma depreciation and amortization charges from acquired tangible and intangible assets and related tax effects for the twelve months ended December 31, 2015 and 2014.

The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning on January 1, 2014 nor is it indicative of future results.