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Business Combination
 6 Months Ended
Jun. 30, 2023
Business Combination and Asset Acquisition [Abstract]  
Business Combination Business Combination
CWH Acquisition
Effective October 1, 2022, Federated Hermes completed the acquisition of substantially all of the assets of C.W. Henderson and Associates, Inc. (CWH), a Chicago-based registered investment advisor specializing in the management of tax-exempt municipal securities (CWH Acquisition). This acquisition enhanced Federated Hermes’ existing separately managed accounts business. The CWH Acquisition included an upfront cash payment of $28.1 million. The purchase agreement also provides for a series of contingent purchase price payments, which can total as much as $17.6 million in the aggregate and is payable annually over the first five years if certain levels of net revenue growth are achieved.
Federated Hermes performed a valuation of the fair value of the CWH Acquisition. As of June 30, 2023, management has completed the review of the valuations for the Right-of-Use Asset, Trade Name, Lease Liability Assumed and the Fair Value of Contingent Consideration. There were no changes to provisional amounts for these acquired assets and assumed liabilities. We continue to analyze the valuation of the acquired Customer Relationships. Due to the complexity in valuing the Customer Relationships, the valuation is not yet final and considered preliminary. Management continues to gather and analyze
information primarily related to the useful life of the Customer Relationships. Although preliminary results for the Customer Relationships valuation are reflected in the Consolidated Financial Statements as of June 30, 2023, the final purchase price allocation may reflect adjustments to this preliminary valuation and such adjustments may be material.
The following table summarizes the preliminary purchase price allocation determined as of the October 1, 2022 purchase date:
(in millions)
Right-of-Use Asset$0.8 
Intangible Assets1
15.4 
Goodwill2
16.4 
Less: Lease Liability Assumed0.8 
Less: Fair Value of Contingent Consideration3.7 
Total Upfront Purchase Price Consideration$28.1 
1    Includes $14.8 million for customer relationships with an estimated useful life of 12 years and $0.6 million for a trade name with an estimated useful life of five years, all of which are recorded in Intangibles Assets, net on the Consolidated Balance Sheets.
2    The goodwill recognized is attributable to enhanced revenue and AUM growth opportunities from future investors and the assembled workforce of CWH and is deductible for tax purposes.