During the year ended December 31, 2022, the Company acquired the assets and assumed certain liabilities of 12 insurance intermediaries, all the stock of 11 insurance intermediaries, and 7 books of businesses (customer accounts). Additionally, adjustments were recorded to the purchase price allocation of certain prior acquisitions completed within the last 12 months as permitted by ASC Topic 805 - Business Combinations (“ASC 805”). Such adjustments are presented in the “Other” category within the following two tables. The recorded purchase price for all acquisitions includes an estimation of the fair value of liabilities associated with any potential earn-out provisions. Subsequent changes in the fair value of earn-out obligations will be recorded in the Consolidated Statements of Income when incurred.

The fair value of earn-out obligations is based on the present value of the expected future payments to be made to the sellers of the acquired businesses in accordance with the provisions outlined in the respective purchase agreements. In determining fair value, the acquired business’s future performance is estimated using financial projections developed by management for the acquired business and reflects market participant assumptions regarding revenue growth and/or profitability. The expected future payments are estimated on the basis of the earn-out formula and performance targets specified in each purchase agreement compared to the associated financial projections. These payments are then discounted to present value using a risk-adjusted rate that takes into consideration the likelihood that the forecasted earn-out payments will be made.

Based on the acquisition date and the complexity of the underlying valuation work, certain amounts included in the Company’s Consolidated Financial Statements may be provisional and thus subject to further adjustments within the permitted measurement period, as defined in ASC 805. For the year ended December 31, 2022, adjustments were made within the permitted measurement period that resulted in a decrease in the aggregate purchase price of the affected acquisitions of $0.1 million. These measurement period adjustments have been reflected as current period adjustments in the year ended December 31, 2022. The measurement period adjustments primarily impacted goodwill, with no effect on earnings or cash in the current period.

Gross cash paid for acquisitions was $2,544.4 million and $424.6 million in the years ended December 31, 2022 and 2021, respectively. We completed 30 acquisitions (including book of business purchases) during the year ended December 31, 2022. We completed 19 acquisitions (including book of business purchases) during the year ended December 31, 2021.

The following table summarizes the purchase price allocations made as of the date of each acquisition for current year acquisitions and adjustments made during the measurement period for prior year acquisitions. During the measurement periods, the Company will adjust assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of those assets and liabilities as of that date. These adjustments are made in the period in which the amounts are determined and the current period income effect of such adjustments will be calculated as if the adjustments had been completed as of the acquisition date.


(in millions)
Name	Business segment	Effective date of acquisition	Cash paid		Common stock issued		Other payable		Recorded earn-out payable		Net assets acquired		Maximum potential earn-out payable
Orchid Underwriters Agency, LLC (Orchid)	National Programs	March 31, 2022	$	476.2	$	—	$	—	$	10.8	$	487.0	$	20.0
GRP (Jersey) Holdco Limited (GRP)	Retail National Programs Wholesale	July 1, 2022		1,839.8		14.7		—		—		1,854.5		—
First Insurance Solutions Ltd. (First)	Retail	July 8, 2022		13.0		—		1.4		8.3		22.7		9.2
BdB Holdings Limited (BdB)	Wholesale	August 1, 2022		75.3		—		—		11.1		86.4		36.3
Smithwick & Mariners Insurance, Inc. (Smithwick)	Retail	September 1, 2022		23.2		—		1.0		1.6		25.8		6.5
VistaNational Insurance Group, Inc. (VistaNational)	Retail	September 1, 2022		26.7		—		0.8		1.1		28.6		3.0
Taylor Berry Knight Limited (Taylor)	Retail	November 16, 2022		27.1		—		0.2		17.8		45.1		17.8
Other	Various	Various		63.1		—		2.2		22.6		87.9		19.6
Total			$	2,544.4	$	14.7	$	5.6	$	73.3	$	2,638.0	$	112.4

The following table summarizes the estimated fair values of the aggregate assets and liabilities acquired as of the date of each acquisition and adjustments made during the measurement period of the prior year acquisitions.


(in millions)	Orchid			GRP			First			BdB			Smithwick			VistaNational			Taylor			Other (1)			Total
Cash and equivalents	$	3.2		$	80.3		$	2.4		$	15.8		$	—		$	—		$	1.0		$	1.0		$	103.7
Fiduciary cash		40.5			457.5			1.4			13.6			—			—			—			—			513.0
Fiduciary receivables		12.5			141.9			—			21.6			—			—			—			—			176.0
Other current assets		0.1			86.9			0.9			8.8			0.8			1.7			3.7			(7.8	)		95.1
Fixed assets		1.8			12.7			—			0.6			—			0.1			0.2			0.1			15.5
Goodwill		411.9			1,366.5			14.5			56.0			19.7			20.9			34.7			70.3			1,994.5
Purchased customer accounts and other		107.8			496.8			5.2			14.0			6.7			6.1			8.7			23.9			669.2
Non-compete agreements		—			—			0.2			0.3			0.1			0.1			0.3			1.0			2.0
Operating lease right-of-use assets		6.0			18.7			—			—			—			—			—			—			24.7
Other assets		1.9			8.8			—			—			0.3			—			—			0.3			11.3
Total assets acquired		585.7			2,670.1			24.6			130.7			27.6			28.9			48.6			88.8			3,605.0
Fiduciary liabilities		(53.0	)		(599.4	)		(1.4	)		(35.2	)		—			—			—			—			(689.0	)
Other current liabilities		(9.5	)		(64.6	)		(0.5	)		(3.3	)		(1.8	)		(0.3	)		(1.6	)		(0.9	)		(82.5	)
Deferred income tax, net		(30.2	)		(122.5	)		—			(4.0	)		—			—			—			—			(156.7	)
Operating lease liabilities		(6.0	)		(18.7	)		—			—			—			—			—			—			(24.7	)
Other long-term liabilities		—			(10.4	)		—			(1.8	)		—			—			(1.9	)		—			(14.1	)
Total liabilities assumed		(98.7	)		(815.6	)		(1.9	)		(44.3	)		(1.8	)		(0.3	)		(3.5	)		(0.9	)		(967.0	)
Net assets acquired	$	487.0		$	1,854.5		$	22.7		$	86.4		$	25.8		$	28.6		$	45.1		$	87.9		$	2,638.0

(1) The other column represents current year acquisitions with total net assets acquired of less than $20.0 million and adjustments from prior year acquisitions that were made within the permitted measurement period.

The weighted average useful lives for the acquired amortizable intangible assets are as follows: purchased customer accounts, 14.7 years; and non-compete agreements, 4.1 years.

Goodwill of $1,994.5 million, which is net of any opening balance sheet adjustments within the allowable measurement period, was allocated to the Retail, National Programs, and Wholesale Brokerage segments in the amounts of $1,366.6 million, $516.5 million, and $111.4 million, respectively. Of the total goodwill of $1,994.5 million, the amount currently deductible for income tax purposes is $74.4 million. Of the remaining $1,920.1 million of goodwill, $1,913.8 million relates to goodwill that will not be deductible for income tax purposes and $6.3 million relates to recorded earn-out payables which will not be deductible for income tax purposes until it is earned and paid.

For the acquisitions completed during 2022, the results of operations since the acquisition dates have been combined with those of the Company. The total revenues from the acquisitions completed through December 31, 2022 included in the Consolidated Statement of Income for the year ended December 31, 2022 were $217.1 million. The income before income taxes from the acquisitions completed through December 31, 2022, included in the Consolidated Statements of Income for the year ended December 31, 2022, was $8.8 million. If the acquisitions had occurred as of the beginning of the respective periods, the Company’s estimated results of operations would be as shown in the following table. These unaudited pro forma results are not necessarily indicative of the actual results of operations that would have occurred had the acquisitions actually been made at the beginning of the respective periods.

During the year ended December 31, 2021, the Company acquired the assets and assumed certain liabilities of 13 insurance intermediaries, all of the share capital of 1 insurance intermediary, all the stock of 2 insurance intermediaries, and 3 book of business (customer accounts). Additionally, miscellaneous adjustments were recorded to the purchase price allocation of certain prior acquisitions completed within the last twelve months as permitted by ASC 805. Such adjustments are presented in the “Other” category within the following two tables.

For the year ended December 31, 2021, several adjustments were made within the permitted measurement period that resulted in a decrease in the aggregate purchase price of the affected acquisitions of $0.5 million, relating to the assumption of certain liabilities.

The following table summarizes the purchase price allocation made as of the date of each acquisition for current year acquisitions and significant adjustments made during the measurement period for prior year acquisitions:


(in millions)
Name	Business segment	Effective date of acquisition	Cash paid		Common stock issued		Other payable		Recorded earn-out payable		Net assets acquired		Maximum potential earn- out payable
O'Leary Insurances (O'Leary)	Retail	January 1, 2021	$	117.4	$	4.9	$	—	$	15.4	$	137.7	$	30.6
Piper Jordan LLC (Piper)	Retail	May 1, 2021		43.4		—		1.4		9.9		54.7		15.0
Berkshire Insurance Group, Inc. (Berkshire)	Retail	September 1, 2021		41.5		—		—		—		41.5		—
AGIS Network, Inc. (AGIS) (1)	Retail	September 1, 2021		11.2		—		24.1		0.8		36.1		12.3
Winston Financial Services, Inc. (Winston)	Retail	October 1, 2021		79.5		5.0		7.7		16.4		108.6		29.0
Remedy Analytics, Inc. (Remedy)	Retail	October 1, 2021		40.8		—		0.5		7.3		48.6		25.0
Heacock Insurance Group, LLC (Heacock)	Retail	October 1, 2021		18.2		—		0.5		1.9		20.6		6.0
Corporate Insurance Advisors, L.L.C. (CIA)	Retail	December 1, 2021		15.3		—		0.2		6.5		22.0		14.0
Rainmaker Advisory, LLC (Rainmaker)	Retail	December 1, 2021		14.2		—		0.7		5.9		20.8		10.0
HARCO Insurance Services, Inc. (HARCO)	Retail	December 31, 2021		24.3		—		1.0		4.4		29.7		7.3
Other	Various	Various		18.8		—		3.1		7.2		29.1		13.1
Total			$	424.6	$	9.9	$	39.2	$	75.7	$	549.4	$	162.3


(in millions)	O'Leary			Piper		Berkshire		AGIS		Winston			Remedy
Cash	$	45.4		$	—	$	—	$	—	$	5.0		$	6.7
Other current assets		43.5			2.4		1.6		13.7		7.5			1.8
Fixed assets		0.5			—		—		—		1.2			0.1
Goodwill		84.6			40.0		27.1		8.7		74.5			33.3
Purchased customer accounts		40.5			12.3		12.3		13.6		25.0			13.7
Non-compete agreements		0.8			—		—		0.1		0.9			0.5
Other assets		0.1		—			0.5		—		—			1.3
Total assets acquired		215.4			54.7		41.5		36.1		114.1			57.4
Other current liabilities		(72.6	)		—		—		—		(5.5	)		(5.2	)
Deferred income tax, net		(5.1	)		—		—		—		—			(3.6	)
Other liabilities		—		—		—		—		—				—
Total liabilities assumed		(77.7	)		—		—		—		(5.5	)		(8.8	)
Net assets acquired	$	137.7		$	54.7	$	41.5	$	36.1	$	108.6		$	48.6


(in millions)	Heacock			CIA			Rainmaker		HARCO			Other			Total
Cash	$	—		$	—		$	—	$	—		$	0.7		$	57.8
Other current assets		0.8			—			—		0.7			5.0			77.0
Fixed assets		—			—			—		0.1			—			1.9
Goodwill		13.9			17.3			15.0		20.6			15.0			350.0
Purchased customer accounts		5.8			4.8			5.8		8.2			11.7			153.7
Non-compete agreements		—			—			—		—			0.2			2.5
Other assets		0.4			0.3		—			0.5			0.3			3.4
Total assets acquired		20.9			22.4			20.8		30.1			32.9			646.3
Other current liabilities		(0.3	)		(0.4	)		—		(0.4	)		(3.8	)		(88.2	)
Deferred income tax, net		—			—			—		—			—			(8.7	)
Other liabilities		—		—			—		—			—				—
Total liabilities assumed		(0.3	)		(0.4	)		—		(0.4	)		(3.8	)		(96.9	)
Net assets acquired	$	20.6		$	22.0		$	20.8	$	29.7		$	29.1		$	549.4

The weighted average useful lives for the acquired amortizable intangible assets are as follows: purchased customer accounts, 15 years; and non-compete agreements, 5 years.

Goodwill of $350.0 million, which is net of any opening balance sheet adjustments within the allowable measurement period, was allocated to the Retail, National Programs and Wholesale Brokerage segments in the amounts of $346.0 million, ($1.3) million, and $5.3 million, respectively. Of the total goodwill of $350.0 million, the amount currently deductible for income tax purposes is $179.1 million. $117.9 million is non-deductible related to the O'Leary and Remedy acquisitions and the remaining $53.0 million relates to the recorded earn-out payables and will not be deductible until it is earned and paid.

For the acquisitions completed during 2021, the results of operations since the acquisition dates have been combined with those of the Company. The total revenues from the acquisitions completed through December 31, 2021 included in the Consolidated Statement of Income for the year ended December 31, 2021 were $63.8 million. The income before income taxes, including the intercompany cost of capital charge, from the acquisitions completed through December 31, 2021 included in the Consolidated Statement of Income for the year ended December 31, 2021 was a loss of $10.6 million. If the acquisitions had occurred as of the beginning of the respective periods, the Company’s

results of operations would be as shown in the following table. These unaudited pro forma results are not necessarily indicative of the actual results of operations that would have occurred had the acquisitions actually been made at the beginning of the respective periods.

During the year ended December 31, 2020, the Company acquired the assets and assumed certain liabilities of 20 insurance intermediaries, all the stock of 1 F&I administrative services company and 4 book of business (customer accounts). Additionally, miscellaneous adjustments were recorded to the purchase price allocation of certain prior acquisitions completed within the last twelve months as permitted by ASC 805. Such adjustments are presented in the “Other” category within the following two tables.

For the year ended December 31, 2020, several adjustments were made within the permitted measurement period that resulted in an increase in the aggregate purchase price of the affected acquisitions of $3.5 million, relating to the assumption of certain liabilities.


(in millions)
Name	Business segment	Effective date of acquisition	Cash paid		Common stock issued		Other payable		Recorded earn-out payable		Net assets acquired		Maximum potential earn- out payable
Special Risk Insurance Managers Ltd. (Special Risk)	National Programs	January 1, 2020	$	70.2	$	—	$	—	$	9.8	$	80.0	$	14.7
Texas All Risk General Agency, Inc. et al (Texas Risk)	Wholesale Brokerage	January 1, 2020		10.5		—		0.2		0.3		11.0		1.2
The Colonial Group, Inc. et al (Colonial)	Wholesale Brokerage	March 1, 2020		29.0		—		0.5		7.6		37.1		10.2
RLA Insurance Intermediaries, LLC (RLA)	Wholesale Brokerage	March 1, 2020		42.5		—		0.8		11.7		55.0		22.5
Dealer Financial Services of N.C., LLC d/b/a The Sterling Group (Sterling)	Retail	April 1, 2020		19.3		—		0.3		4.1		23.7		5.4
LP Insurance Services, LLC (LP)	National Programs	May 1, 2020		116.0		10.0		0.3		23.4		149.7		75.8
First Resource, Inc. (First)	Retail	July 1, 2020		10.7		—		0.4		3.8		14.9		5.8
Buiten & Associates, LLC (Buiten)	Retail	August 1, 2020		38.2		—		1.2		7.4		46.8		14.2
Amity Insurance, Inc. (Amity)	Retail	August 1, 2020		14.8		2.0		0.2		1.9		18.9		4.0
Frank E. Neal & Co., Inc. (Neal)	Retail	September 1, 2020		32.6		3.1		0.4		5.7		41.8		10.3
BrookStone Insurance Group, LLC (BrookStone)	Retail	September 1, 2020		12.0		—		—		1.1		13.1		1.9
VAS GenPar, LLC (VAS)	Retail	October 1, 2020		114.3		15.0		—		23.3		152.6		48.0
Bright & Associates, Inc. (Bright)	Retail	October 1, 2020		12.5		—		1.2		3.9		17.6		5.8
J.E. Brown & Associates Insurance Services, Inc. (J.E. Brown)	Wholesale Brokerage	October 1, 2020		33.3		—		1.0		6.0		40.3		10.4
CoverHound, Inc. and CyberPolicy, Inc. (CoverHound)	Retail	November 1, 2020		27.6		—		0.6		—		28.2		—
MAJ Companies, Ltd. (MAJ)	Retail	December 1, 2020		19.1		—		0.3		2.0		21.4		6.5
South & Western General Agency, Inc. (South & Western)	Wholesale Brokerage	December 1, 2020		69.7		—		1.2		7.3		78.2		18.0
Berry Insurance Group, Inc. (Berry)	Retail	December 31, 2020		35.3		—		—		3.7		39.0		6.5
Other	Various	Various		14.9		—		0.5		8.5		23.9		12.3
Total			$	722.5	$	30.1	$	9.1	$	131.5	$	893.2	$	273.5

The following table summarizes the estimated fair values of the aggregate assets and liabilities acquired as of the date of each acquisition.


(in millions)	Special Risk			Texas Risk			Colonial			RLA			Sterling			LP			First		Buiten			Amity			Neal
Cash	$	—		$	—		$	—		$	—		$	—		$	—		$	—	$	—		$	—		$	—
Other current assets		2.5			0.5			1.3		—				0.6			3.2			0.3		2.6			0.6			2.3
Fixed assets		0.3			—			0.1			—			—			1.9			—		0.1			0.1			0.1
Goodwill		63.1			9.0			27.9			53.6			17.3			100.0			9.5		33.6			15.5			28.9
Purchased customer accounts		14.3			3.2			9.2			12.3			6.0			44.8			5.1		11.3			5.6			13.2
Non-compete agreements		0.1			—			—			0.5			—			—			—		0.1			—			—
Other assets	—			—			—			—			—			—			—		—			—				0.3
Total assets acquired		80.3			12.7			38.5			66.4			23.9			149.9			14.9		47.7			21.8			44.8
Other current liabilities		(0.3	)		(1.7	)		(1.4	)		(11.4	)		(0.2	)		—			—		(0.9	)		(2.9	)		(3.0	)
Other liabilities	—			—			—			—			—				(0.2	)		—	—			—			—
Total liabilities assumed		(0.3	)		(1.7	)		(1.4	)		(11.4	)		(0.2	)		(0.2	)		—		(0.9	)		(2.9	)		(3.0	)
Net assets acquired	$	80.0		$	11.0		$	37.1		$	55.0		$	23.7		$	149.7		$	14.9	$	46.8		$	18.9		$	41.8


(in millions)	Brook Stone			VAS			Bright			J.E. Brown			Cover Hound			MAJ		South & Western			Berry			Other			Total
Cash	$	—		$	27.7		$	—		$	—		$	—		$	—	$	—		$	—		$	—		$	27.7
Other current assets		0.5			5.5			0.4			—			0.4			0.4		—			—			0.9			22.0
Fixed assets		0.1			0.1			—			—			6.4			—		0.2			—			—			9.4
Goodwill		8.6			100.8			12.2			31.5			19.5			13.0		63.1			29.7			11.3			648.1
Purchased customer accounts		3.7			48.2			5.1			9.5			3.7			8.0		18.5			9.7			8.6			240.0
Non-compete agreements		—			0.1			—			—			—			—		—			—			0.1			0.9
Other assets		0.3			—			—			—			—			—		—			—			3.1			3.7
Total assets acquired		13.2			182.4			17.7			41.0			30.0			21.4		81.8			39.4			24.0			951.8
Other current liabilities		(0.1	)		(3.7	)		(0.1	)		(0.7	)		(1.8	)		—		(3.6	)		(0.4	)		(0.1	)		(32.3	)
Other liabilities	—				(26.1	)		—			—			—			—		—			—			—			(26.3	)
Total liabilities assumed		(0.1	)		(29.8	)		(0.1	)		(0.7	)		(1.8	)		—		(3.6	)		(0.4	)		(0.1	)		(58.6	)
Net assets acquired	$	13.1		$	152.6		$	17.6		$	40.3		$	28.2		$	21.4	$	78.2		$	39.0		$	23.9		$	893.2

The weighted average useful lives for the acquired amortizable intangible assets are as follows: purchased customer accounts, 15 years; and non-compete agreements, 5 years.

Goodwill of $648.1 million was allocated to the Retail, National Programs, Wholesale Brokerage and Services segments in the amounts of $300.0 million, $163.1 million, $185.0 million and $0.1 million, respectively. Of the total goodwill of $648.1 million, $516.7 million is currently deductible for income tax purposes. The remaining $131.4 million relates to the recorded earn-out payables and will not be deductible until it is earned and paid.

For the acquisitions completed during 2020, the results of operations since the acquisition dates have been combined with those of the Company. The total revenues from the acquisitions completed through December 31, 2020 included in the Consolidated Statement of Income for the year ended December 31, 2020 were $93.9 million. The income before income taxes, including the intercompany cost of capital charge, from the acquisitions completed through December 31, 2020 included in the Consolidated Statement of Income for the year ended December 31, 2020 was $7.5 million. If the acquisitions had occurred as of the beginning of the respective periods, the Company’s results of

operations would be as shown in the following table. These unaudited pro forma results are not necessarily indicative of the actual results of operations that would have occurred had the acquisitions actually been made at the beginning of the respective periods.

ASC 805 is the authoritative guidance requiring an acquirer to recognize 100% of the fair values of acquired assets, including goodwill, and assumed liabilities (with only limited exceptions) upon initially obtaining control of an acquired entity. Additionally, the fair value of contingent consideration arrangements (such as earn-out purchase arrangements) at the acquisition date must be included in the purchase price consideration. The recorded purchase prices for acquisitions include an estimation of the fair value of liabilities associated with any potential earn-out provisions. Subsequent changes in these earn-out obligations will be recorded in the Consolidated Statements of Income when incurred or reasonably estimated. Estimations of potential earn-out obligations are typically based upon future earnings of the acquired operations or entities, usually for periods ranging from one to three years.

As of December 31, 2022, the fair values of the estimated acquisition earn-out payables were re-evaluated and measured at fair value on a recurring basis using unobservable inputs (Level 3) as defined in ASC 820-Fair Value Measurement. The resulting additions, payments and net changes, as well as the interest expense accretion on the estimated acquisition earn-out payables, for the years ended December 31, 2022, 2021 and 2020 were as follows:

Of the $251.6 million of estimated acquisition earn-out payables as of December 31, 2022, $119.3 million was recorded as current liabilities within the accounts payable caption in the Company's Consolidated Balance Sheets and $132.3 million was recorded as non-current liabilities within the other liabilities caption in the Company's Consolidated Balance Sheets. Included within additions to estimated acquisition earn-out payables are any adjustments to opening balance sheet items within the allowable measurement period, which may therefore differ from previously reported amounts. Of the $291.0 million of estimated acquisition earn-out payables as of December 31, 2021, $78.4 million was recorded as accounts payable, and $212.6 million was recorded as other liabilities. Of the $258.9 million of estimated acquisition earn-out payables as of December 31, 2020, $79.2 million was recorded as accounts payable, and $179.7 million was recorded as other liabilities.

As of December 31, 2022, the maximum future contingency payments related to all acquisitions totaled $542.8 million. Four of the estimated acquisition earn-out payables assumed in connection with the acquisition of GRP included provisions with no maximum potential earn-out amount. The amount recorded for these acquisitions as of December 31, 2022, is $3.0 million. The Company deems a significant increase to this amount to be unlikely.