Business Combinations

6 Months Ended

Jun. 30, 2025

During the six-month period ended June 30, 2025, we acquired substantially all of the ownership interest or net assets, as applicable, of the following firms in exchange for our common stock and/or cash. These acquisitions have been accounted for using the acquisition method for recording business combinations (in millions, except share data):


Name and Effective Date of Acquisition	Common Shares Issued	Common Shares Value		Cash Paid		Accrued Liability		Escrow Deposited		Recorded Earnout Payable		Total Recorded Purchase Price		Maximum Potential Earnout Payable
	(000s)
W K Webster & Co Ltd February 1, 2025 (WKW)	—	$	—	$	138.4	$	1.9	$	—	$	13.9	$	154.2	$	28.5
Case Group February 26, 2025 (CSG)	—	—		57.8		3.5		6.5		15.0		82.8		84.1
Woodruff Sawyer & Co April 10, 2025 (WSC)	—	—		1,195.5		12.2		66.6		—		1,274.3		—
Seventeen other acquisitions completed in 2025	49	16.0		260.0		18.7		10.8		50.0		355.5		95.4
	49	$	16.0	$	1,651.7	$	36.3	$	83.9	$	78.9	$	1,866.8	$	208.0

On December 7, 2024, we signed a definitive agreement to acquire all of the issued and outstanding stock of Dolphin Topco, Inc., the holding company of AssuredPartners for gross consideration of $13.45 billion. The transaction is subject to customary regulatory approvals. On March 7, 2025, we received a request for additional information as part of the HSR filing. We have responded to the request and expect that the transaction will close in the third quarter of 2025. AssuredPartners is a leading U.S. insurance broker with client capabilities across commercial property/casualty, specialty, employee benefits and personal lines with operations in the U.K. and Ireland. We raised $8.5 billion of cash in our December 11, 2024 follow-on common stock offering and borrowed $5.0 billion of cash in our December 19, 2024 senior notes issuance (which we refer to, together with the follow-on common stock offering, as the AssuredPartners Financing), to fund the transaction. On January 7, 2025, we received an additional $1.28 billion of cash due to the exercise by the underwriters of the overallotment provision related to the follow-on common stock offering.

On April 10, 2025, we acquired all of the issued and outstanding stock of Woodruff Sawyer for consideration of $1.2 billion. We funded the transaction using cash on hand. Woodruff Sawyer provides a full suite of commercial property/casualty products, employee benefits solutions and risk management services with a focus on middle and large market clients. Immediately prior to closing, Woodruff Sawyer had over 600 employees serving through 14 U.S. offices and one U.K. office.

Common shares issued in connection with acquisitions are valued at closing market prices as of the effective date of the applicable acquisition or on the days when the shares are issued, if purchase consideration is deferred. We record escrow deposits that are returned to us as a result of adjustments to net assets acquired as reductions of goodwill when the escrows are settled. The maximum potential earnout payables disclosed in the foregoing table represent the maximum amount of additional consideration that could be paid pursuant to the terms of the purchase agreement for the applicable acquisition. The amounts recorded as earnout payables, which are primarily based upon the estimated future operating results of the acquired entities over a two- to three-year period subsequent to the acquisition date, are measured at fair value as of the acquisition date and are included on that basis in the recorded purchase price consideration in the foregoing table. We will record subsequent changes in these estimated earnout obligations, including the accretion of discount, in our consolidated statement of earnings when incurred.

The fair value of these earnout obligations is generally based on the present value of the expected future payments to be made to the sellers of the acquired entities in accordance with the provisions outlined in the respective purchase agreements, which is a Level 3 fair value measurement (discounted cash flow method of the income approach). In determining fair value, we estimated the acquired entity’s future performance using financial projections developed by management for the acquired entity and market participant assumptions that were derived for revenue growth and/or profitability. Revenue growth rates generally ranged from 5.0% to 17.5% for our 2025 acquisitions. We estimated future payments using the earnout formula and performance targets specified in each purchase agreement and the financial projections just described. We then discounted these payments to present value using a risk-adjusted rate that takes into consideration market-based rates of return that reflect the ability of the acquired entity to achieve the targets. The discount rate was 9.0% for all of our 2025 acquisitions. In some instances, the fair value of these earnout obligations can be based on other valuation methods including the Black-Scholes Option Pricing Method or Monte Carlo Simulation method. Changes in financial projections, market participant assumptions for revenue growth and/or profitability, or the risk-adjusted discount rate, would result in a change in the fair value of recorded earnout obligations.

During the three-month periods June 30, 2025 and 2024, we recognized $11.1 million and $15.0 million, respectively, of expense in our consolidated statement of earnings related to the accretion of the discount recorded for earnout obligations

in connection with our acquisitions. During the six-month periods ended June 30, 2025 and 2024, we recognized $24.1 million and $33.8 million, respectively, of expense in our consolidated statement of earnings related to the accretion of the discount recorded for earnout obligations in connection with our acquisitions. In addition, during the three-month periods June 30, 2025 and 2024, we recognized $16.7 million of income and $3.8 million of expense, respectively, related to net adjustments in the estimated fair value of the liability for earnout obligations in connection with revised assumptions due to changes in interest rates, volatility and other assumptions and projections of future performance for 36 and 30 acquisitions, respectively. In addition, during the six-month periods ended June 30, 2025 and 2024, we recognized $13.9 million and $31.1 million of income, respectively, related to net adjustments in the estimated fair value of the liability for earnout obligations in connection with revised assumptions due to changes in interest rates, volatility and other assumptions and projections of future performance for 56 and 58 acquisitions, respectively. The aggregate amount of maximum earnout obligations related to acquisitions was $1,411.5 million as of June 30, 2025, of which $600.3 million was recorded in the consolidated balance sheet as of June 30, 2025, based on the estimated fair value of the expected future payments to be made, of which approximately $546.7 million can be settled in cash or stock at our option and $53.6 million must be settled in cash.

The following is a summary of the estimated fair values of the net assets acquired at the date of each acquisition made in the six-month period ended June 30, 2025 (in millions):


	WKW		CSG		WSC		Seventeen Other Acquisitions		Total
Cash and cash equivalents	$	5.3	$	5.6	$	61.9	$	20.7	$	93.5
Fiduciary assets	86.8		—		465.3		41.6		593.7
Other current assets	16.7		4.0		77.6		8.7		107.0
Fixed assets	1.1		1.0		12.8		1.1		16.0
Noncurrent assets	2.2		—		25.0		2.9		30.1
Goodwill	83.7		49.5		658.1		236.4		1,027.7
Expiration lists	70.9		36.2		673.4		155.2		935.7
Non-compete agreements	7.9		7.3		2.4		4.0		21.6
Total assets acquired	274.6		103.6		1,976.5		470.6		2,825.3
Fiduciary liabilities	86.8		—		465.3		41.6		593.7
Current liabilities	11.8		7.3		35.2		10.8		65.1
Noncurrent liabilities	21.8		13.5		201.7		62.7		299.7
Total liabilities assumed	120.4		20.8		702.2		115.1		958.5
Total net assets acquired	$	154.2	$	82.8	$	1,274.3	$	355.5	$	1,866.8

Among other things, these acquisitions allow us to expand into desirable geographic locations, further extend our presence in the third party claims administration, retail and wholesale insurance and reinsurance brokerage markets and increase the volume of general services currently provided. The excess of the purchase price over the estimated fair value of the tangible net assets acquired at the acquisition date was allocated to goodwill, expiration lists and non-compete agreements in the amounts of $1,027.7 million, $935.7 million and $21.6 million, respectively, within the brokerage and risk management segments.

Provisional estimates of fair value are established at the time of each acquisition and are subsequently reviewed and finalized within the first year of operations subsequent to the acquisition date to determine the necessity for adjustments. During this period, we may use independent third-party valuation specialists to assist us in finalizing the fair value of assets acquired and liabilities assumed. Fair value adjustments, if any, are most common to the values established for amortizable intangible assets, including expiration lists, non‑compete agreements and trade names, as well as for acquired software, and earnout liabilities, with the offset to goodwill, net of any income tax effect.

The fair value of the tangible assets and liabilities for each applicable acquisition at the acquisition date approximated their carrying values. In general, the fair value of expiration lists was established using the excess earnings method, which is an income approach based on estimated financial projections developed by management for each acquired entity using market participant assumptions. Revenue growth and attrition rates generally ranged from 3.0% to 4.1% and 5.0% to 12.0%, respectively, for our 2024 acquisitions for which valuations were performed in 2025. We estimate the fair value as the present value of the benefits anticipated from ownership of the subject expiration list in excess of returns required on the investment in contributory assets necessary to realize those benefits. The rate used to discount the net benefits was based on

a risk-adjusted rate that takes into consideration market-based rates of return and reflects the risk of the asset relative to the acquired business. The discount rates generally ranged from 11.0% to 11.5% for our 2024 acquisitions for which valuations were performed in 2025. The fair value of non-compete agreements was established using the profit differential method, which is an income approach based on estimated financial projections developed by management for the acquired company using market participant assumptions and various non-compete scenarios.

Expiration lists, non-compete agreements and trade names related to our acquisitions are amortized using the straight-line method over their estimated useful lives (two to fifteen years for expiration lists, two to six years for non-compete agreements and two to fifteen years for trade names), while goodwill is not subject to amortization. We use the straight-line method to amortize these intangible assets because the pattern of their economic benefits cannot be reasonably determined with any certainty. We review all of our identifiable intangible assets for impairment periodically (at least annually) and whenever events or changes in business circumstances indicate that the carrying value of the assets may not be recoverable. In reviewing identifiable intangible assets, if the undiscounted future cash flows were less than the carrying amount of the respective (or underlying) asset, an indicator of impairment would exist and further analysis would be required to determine whether or not a loss would need to be charged against current period earnings as a component of amortization expense. Based on the results of impairment reviews and decisions made to exit some non-core operations during the six-month period ended June 30, 2025, we wrote off $40.6 million of amortizable assets related to the brokerage segment. Based on the results of impairment reviews during the three and six-month periods ended June 30, 2024 we wrote off $14.0 million of amortizable assets related to the brokerage segment.

Of the $935.7 million of expiration lists and $21.6 million of non-compete agreements related to our acquisitions made during the six-month period ended June 30, 2025, $885.0 million and $20.6 million, respectively, are not expected to be deductible for income tax purposes. Accordingly, we recorded a deferred tax liability of $237.8 million and a corresponding amount of goodwill in the six-month period ended June 30, 2025, related to the nondeductible amortizable intangible assets.

Our unaudited consolidated financial statements for the six-month period ended June 30, 2025 include the operations of the entities acquired in the six-month period ended June 30, 2025 from their respective acquisition dates. The following is a summary of the unaudited pro forma historical results, as if these entities had been acquired at January 1, 2024 (in millions, except per share data):


	Three-month period ended June 30,				Six-month period ended June 30,
	2025		2024		2025		2024
Total revenues	$	3,229.5	$	2,872.1	$	7,031.7	$	6,218.5
Net earnings attributable to controlling interests	366.4		282.4		1,060.4		881.2
Basic net earnings per share	1.43		1.29		4.15		4.04
Diluted net earnings per share	1.41		1.27		4.08		3.96

The unaudited pro forma results above have been prepared for comparative purposes only and do not purport to be indicative of the results of operations which actually would have resulted had these acquisitions occurred at January 1, 2024, nor are they necessarily indicative of future operating results. Annualized revenues of entities acquired during the six-month period ended June 30, 2025 totaled approximately $391.7 million. For the six-month period ended June 30, 2025, total revenues, net pretax loss and net earnings before interest, income taxes, depreciation, amortization and the change in estimated acquisition earnout payables (EBITDAC) recorded in our unaudited consolidated statement of earnings related to our acquisitions made during the six-month period ended June 30, 2025 in the aggregate, were $98.3 million, $(28.3) million and $1.2 million, respectively.