Acquisitions

9 Months Ended

Sep. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Owned Distribution - Acquisition of Roar

On January 2, 2024, F&G acquired a 70% majority ownership stake in the equity of Roar. Roar wholesales life insurance and annuity products to banks and broker dealers through a network of agents. Under the terms of the purchase agreement, the Company has agreed to make cash payments of up to $90 million over a three-year period upon the achievement of certain EBITDA milestones of Roar.

The initial purchase price is as follows (in millions):


Cash paid for 70% majority interest of Roar shares	$	269
Less: Cash acquired net of noncontrolling interests	1
Net cash paid for 70% majority interest of Roar	268
Initial fair value of contingent consideration	48
Total initial consideration	$	316

The following table summarizes the fair value amounts recognized for the assets acquired and liabilities assumed as of the acquisition date:


	Fair value as of January 2, 2024


	(In millions)
Goodwill	$	268
Prepaid expenses and other assets	3
Other intangible assets	183
Total assets acquired	454

Accounts payable and accrued liabilities	2
Total liabilities assumed	2

Noncontrolling interests (fair value determined using income approach)	136
Total liabilities assumed and non-controlling interests	138

Net assets acquired	$	316

The gross carrying value and weighted average estimated useful lives of Other intangible assets acquired in the Roar acquisition consist of the following:


	Gross Carrying Value		Estimated Useful Life
Other intangible assets:	(In millions)		(In years)
Customer relationships	$	179	12
Definite lived trademarks, tradenames, and other	4		10
Total Other intangible assets	$	183

Goodwill consists primarily of intangible assets that do not qualify for separate recognition, such as the assembled workforce and synergies between the entities. The total amount of goodwill recorded is expected to be deductible for tax purposes.

Roar’s revenues of $19 million and $60 million and net earnings of $2 million and $6 million are included in the unaudited Condensed Consolidated Statement of Earnings for the three and nine months ended September 30, 2024, respectively.

Contingent Consideration

Under the terms of the purchase agreement for Roar, we have agreed to make cash payments of up to $90 million over a three-year period upon the achievement by Roar of certain EBITDA milestones. The contingent consideration is recorded at fair value in Accounts payable and accrued liabilities. Refer to Note A Basis of Financial Statements for more information on the Roar purchase and refer to Note C Fair Value of Financial Instruments for more information regarding the fair value of the contingent consideration.

Owned Distribution - Acquisition of PALH, LLC

On July 18, 2024, F&G acquired a 100% ownership stake in the equity of PALH. PALH markets and sells life insurance and annuity products of various insurance carriers to individuals through a network of agents. Prior to the acquisition date, PALH owned a 70% ownership stake in an operating company of which F&G owned 30% equity. Immediately before the acquisition date, the fair value of F&G’s minority stake in the operating company was approximately $92 million, derived from the transaction value. The transaction value contemplates measures such as EBITDA margin, revenue growth over time periods and growth opportunities. This remeasurement resulted in a realized gain of $2 million recorded in Recognized gains and losses, net in the unaudited Condensed Consolidated Statements of Earnings during the three and nine months ended September 30, 2024.

The initial purchase price was as follows (in millions):


Cash consideration	$	215
Less: Cash acquired	1
Net cash paid	214
Settlement of prepaid asset	8
Acquisition date fair value of previously held interests	92
Total consideration	$	314

The following table summarizes the fair value amounts recognized for the assets acquired and liabilities assumed as of the acquisition date (in millions):


	Fair value as of July 18, 2024


Goodwill	$	162
Prepaid expenses and other assets	5
Other intangible assets	149
Total assets acquired	316

Accounts payable and accrued liabilities	2
Total liabilities assumed	2
Net assets acquired	$	314

The gross carrying value and weighted average estimated useful lives of Other intangible assets acquired in the PALH acquisition consist of the following:


	Gross Carrying Value		Estimated Useful Life
Other intangible assets:	(In millions)		(In years)
Customer relationships	$	131	20
Definite lived trademarks, tradenames, and other	18		5 to 10
Total Other intangible assets	$	149

Goodwill consists primarily of intangible assets that do not qualify for separate recognition, such as the assembled workforce and synergies between the entities. A portion of the total amount of goodwill recorded is expected to be deductible for tax purposes.