XML 31 R12.htm IDEA: XBRL DOCUMENT v3.25.4
Acquisitions
 12 Months Ended
Dec. 31, 2025
Business Combination [Abstract]  
Acquisitions ACQUISITIONS
The following acquisitions were accounted for pursuant to FASB Accounting Standards Codification Topic 805, "Business Combinations." Accordingly, the purchase price of each acquisition was allocated to the acquired assets and liabilities assumed based on their estimated fair values as of the respective acquisition dates. The excess of the purchase price over the net assets acquired was allocated between goodwill and intangible assets. The fair value of the equity consideration and retention-related restricted stock was determined using the market price of the Company's common stock on the date of the respective acquisition.

2025 Acquisition
G Squared Capital Partners LLC ("G Squared")
On September 12, 2025, the Company completed the acquisition of G Squared, a boutique investment bank specializing in government services and defense technology. The acquisition expands the scale of the Company's investment banking technology sector. The purchase price consisted of cash consideration, and restricted stock and restricted cash were granted for retention purposes.

Additional cash of up to $8.0 million may be earned by certain employees if a net revenue target is achieved during the performance period from January 1, 2026 to December 31, 2027 and they are employed by the Company at the time of the respective payment. Amounts estimated to be payable, if any, will be recorded as compensation expense on the consolidated statements of operations over the requisite service period. If earned, amounts will be paid in the first quarter of 2028 and in the first quarter of 2029.

The Company recorded $7.3 million of goodwill on the consolidated statements of financial condition, all of which is expected to be deductible for income tax purposes. In management's opinion, the goodwill represents the reputation and operating expertise of G Squared. Identifiable intangible assets purchased by the Company consisted of customer relationships with an acquisition date fair value of $2.2 million.
2024 Acquisition
Aviditi Capital Advisors, LLC ("Aviditi Advisors")
On August 23, 2024, the Company completed the acquisition of Aviditi Advisors, an alternative investment bank providing full lifecycle services to financial sponsors, global alternative investment managers and limited partner investors. The acquisition added private capital advisory capabilities to the platform.

The economic value on the acquisition date was $70 million, which consisted of cash consideration, equity consideration, contingent consideration and contingently returnable consideration, as well as various compensation obligations, as described below.

The equity consideration of $6.0 million consisted of 21,835 shares, which vested immediately and were not subject to service requirements. The contingently returnable consideration of $4.1 million represents the fair value of consideration that is contingently returnable to the Company if certain revenue thresholds are not achieved during the performance period ended December 31, 2024. The equity consideration and contingently returnable consideration were included in the purchase price in addition to the cash consideration of $23.9 million and contingent consideration, which was immaterial based on the acquisition date fair value. The net assets acquired by the Company of $34.5 million are described below.

The compensation obligations of $35.7 million include existing deferred compensation obligations of Aviditi Advisors that were assumed by the Company on the acquisition date and acquisition-related arrangements entered into with certain employees for retention purposes. These compensation obligations consisted of restricted stock ($11.8 million), restricted mutual fund shares of investment funds ($8.6 million), restricted cash ($5.3 million) and forgivable loans ($10.0 million). As employees must fulfill service requirements in exchange for the rights to the restricted shares, restricted mutual fund shares and restricted cash, compensation expense will be amortized on a straight-line basis over the requisite service period. See Note 18 for further discussion on the restricted shares and restricted mutual fund shares. The restricted cash will generally vest in quarterly installments through the first quarter of 2028. The loans will be forgiven, so long as the applicable employees remain continuously employed for the loan term of three to five years. Compensation expense will be amortized on a straight-line basis over the loan term.

Additional cash of up to $86.3 million may be earned if certain net revenue targets are achieved during the performance period from August 23, 2024 to December 31, 2028. Certain amounts may be earned by Aviditi Advisors' non-employee equity owners with no service requirements. The Company recorded a liability as of the acquisition date for the fair value of this contingent consideration, which was included in the purchase price. Adjustments to this liability after the acquisition date, if any, will be recorded as non-compensation expense on the consolidated statements of operations. The remaining amounts may be earned by employee owners in exchange for service requirements. As these amounts compensate employees for future services, the value was not part of the purchase price. Amounts estimated to be payable, if any, will be recorded as compensation expense on the consolidated statements of operations over the respective requisite service period. If earned, amounts will be paid on various dates through the second quarter of 2029.
The following table summarizes the estimated fair values of assets acquired and liabilities assumed at the date of the acquisition, including measurement period adjustments:
(Amounts in thousands)
Assets
Cash and cash equivalents$11,717 
Right-of-use lease assets
1,898 
Goodwill10,184 
Intangible assets1,471 
Other assets (1)
43,211 
Total assets acquired68,481 
Liabilities
Short-term financing (2)
17,342 
Accrued compensation12,898 
Accrued lease liabilities
1,898 
Other liabilities and accrued expenses1,794 
Total liabilities assumed33,932 
Net assets acquired$34,549 
(1)Primarily consists of installment fee receivables.
(2)Amount was immediately repaid in full on August 23, 2024. See Note 13 for further information.

The Company recorded $10.2 million of goodwill on the consolidated statements of financial condition, all of which is expected to be deductible for income tax purposes. In management's opinion, the goodwill represents the reputation and operating expertise of Aviditi Advisors. Identifiable intangible asset purchased by the Company consisted of customer relationships with an acquisition date fair value of $1.5 million.

Integration costs of $2.5 million were incurred for the year ended December 31, 2024, and are included in restructuring and integration costs on the consolidated statements of operations.

Pro Forma Financial Information
The results of operations of G Squared and Aviditi Advisors have been included in the Company's consolidated financial statements prospectively beginning on the respective acquisition dates. The acquisitions have been fully integrated with the Company's existing operations. Accordingly, post-acquisition revenues and net income are not discernible. Pro forma financial information for G Squared is not presented as the acquisition is not material. Pro forma financial information for Aviditi Advisors is not presented as the impact to the Company's historical results is not material.