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Business Combinations (Notes) | Apr. 01, 2020
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Business Combinations [Abstract] |
Business Combination Disclosure | Business Combinations The Company completed ten business combinations for an aggregate purchase price of $387.5 million during the nine months ended September 30, 2021. In accordance with ASC Topic 805, Business Combinations (“Topic 805”), total consideration was first allocated to the fair value of assets acquired, including liabilities assumed, with the excess being recorded as goodwill. For financial statement purposes, goodwill is not amortized but rather is evaluated for impairment at least annually or more frequently if an event or change in circumstances occurs that indicates goodwill may be impaired. Goodwill is deductible for tax purposes and will be amortized over a period of 15 years. The recorded purchase price for most business combinations includes an estimation of the fair value of contingent consideration obligations associated with potential earnout provisions, which are generally based on recurring revenue. The contingent earnout consideration amounts identified in the tables below are measured at fair value within Level 3 of the fair value hierarchy as discussed further in Note 13. Any subsequent changes in the fair value of contingent earnout liabilities will be recorded in the condensed consolidated statements of comprehensive loss when incurred. The recorded purchase price for many business combinations also includes an estimation of the fair value of equity interests, which is calculated based on the value of the Company’s Class A common stock on the closing date taking into account a discount for lack of marketability. Any equity interests granted in shares of Class B common stock also include an upward adjustment for the cash flow associated with the Tax Receivable Agreement. The Company completed the following business combinations during the nine months ended September 30, 2021: •LeaseTrack Services LLC and Effective Coverage LLC (collectively, “LeaseTrack”), a Specialty Partner effective February 1, 2021, provides a complementary service offering to the MGA of the Future’s Master Tenant product for property managers and distribution partners. •Riley Financial, Inc. (operating as “Medicare Help Now”), a Medicare Partner effective March 1, 2021, further bolsters the Company’s Medicare business presence in the Pacific Northwest. •Tim Altman, Inc. (operating as “Only Medicare Solutions”), a Medicare Partner effective April 1, 2021, expands the Company’s Pacific Northwest Medicare Advantage presence. •Seniors’ Insurance Services of Washington, Inc. (“Seniors’ Insurance Services”), a Medicare Partner effective April 30, 2021, strengthens and expands the Company’s Medicare presence in the Pacific Northwest. •Mid-Continent Companies, Ltd. and Mid-Continent Securities Ltd. (collectively, “Mid-Continent”), a Middle Market Partner effective April 30, 2021, expands the Company’s capabilities and Middle Market presence in Texas. •RogersGray Inc. and Breakwater Brokerage, LLC, collectively, a Middle Market Partner, and Monomoy Insurance Group, LLC, a Specialty Partner (collectively, “RogersGray”), effective July 1, 2021, enhances and further expands the Company’s geographic footprint and product offerings in New England and the broader Northeast region. •EBSME, LLC (“EBSME”), a Middle Market Partner effective July 30, 2021, expands employee benefits service offerings to the Company’s Middle Market clients. •FounderShield LLC, AlphaRoot LLC, ReShield LLC, and Scale Underwriting Services LLC (collectively, “FounderShield”), a Specialty Partner effective August 2, 2021, brings to BRP Group unique expertise for rapidly-scaling companies in numerous high-growth industry verticals across the Technology & Fintech, Life Sciences and Emerging Markets sectors. •The Capital Group, LLC, The Capital Group Association Consultants, LLC, US Underwriters, LLC, TCG Financial Management Company, LLC and The Capital Group Investment Advisory Services, LLC (collectively, “The Capital Group”), a Middle Market Partner effective August 2, 2021, adds scale and density in the critical D.C. Metro region. •River Oak Risk, LLC and River Oak Risk Holdings, LLC (collectively “River Oak Risk”), a Specialty Partner effective August 4, 2021, expands the Company’s captive risk solutions for its Middle Market and Specialty clients. The operating results of these business combinations have been included in the condensed consolidated statements of comprehensive loss since their respective acquisition dates. The Company recognized total revenues and net loss from these business combinations of $18.8 million and $1.2 million, respectively, for the nine months ended September 30, 2021. Acquisition-related costs incurred in connection with these business combinations are recorded in other operating expenses in the condensed consolidated statements of comprehensive loss. The Company incurred acquisition-related costs from these business combinations of $2.4 million for the nine months ended September 30, 2021. Due to the complexity of valuing the consideration paid and the purchase price allocation and the timing of these activities, certain amounts included in the consolidated financial statements may be provisional and subject to additional adjustments within the measurement period as permitted by Topic 805. Specifically, the Company's valuations of premiums, commissions and fees receivable in accordance with Topic 606 are estimates subject to change based on relevant factors over the policy period. The valuations of intangible assets are also estimates based on assumptions of factors such as discount rates and growth rates. Accordingly, these assets are subject to measurement period adjustments as determined after the passage of time. Any measurement period adjustments related to prior period business combinations are reflected as current period adjustments in accordance with Topic 805. Refer to Note 8 for information regarding measurement period adjustments recorded during the nine months ended September 30, 2021. The table below provides a summary of the total consideration and the estimated purchase price allocations made for each of the business acquisitions that became effective during the nine months ended September 30, 2021. The “All Others” column includes amounts for the Medicare Help Now, Only Medicare Solutions, Seniors’ Insurance Services, Mid-Continent and EBSME business combinations.
(in thousands) | LeaseTrack |  | RogersGray |  | FounderShield |  | The Capital Group |  | River Oak Risk |  | All Others |  | Totals
Cash consideration paid | $ | 12,984 |  |  | $ | 135,135 |  |  | $ | 20,863 |  |  | $ | 28,558 |  |  | $ | 18,908 |  |  | $ | 16,786 |  |  | $ | 233,234 |
Fair value of contingent earnout consideration | 6,116 |  |  | 18,976 |  |  | 18,033 |  |  | 10,006 |  |  | 5,163 |  |  | 2,571 |  |  | 60,865 |
Fair value of equity interest | 1,652 |  |  | 39,765 |  |  | 14,624 |  |  | 13,393 |  |  | 3,574 |  |  | 2,626 |  |  | 75,634 |
Deferred payment | — |  |  | 1,608 |  |  | 2,985 |  |  | 10,336 |  |  | 89 |  |  | 2,772 |  |  | 17,790 |
Total consideration | $ | 20,752 |  |  | $ | 195,484 |  |  | $ | 56,505 |  |  | $ | 62,293 |  |  | $ | 27,734 |  |  | $ | 24,755 |  |  | $ | 387,523 |
Cash | $ | 100 |  |  | $ | 2,766 |  |  | $ | 221 |  |  | $ | 613 |  |  | $ | 290 |  |  | $ | 145 |  |  | $ | 4,135 |
Restricted cash | 2 |  | 4,211 |  |  | 3,199 |  |  | — |  |  | 160 |  |  | — |  |  | 7,572 |
Premiums, commissions and fees receivable | 729 |  |  | 9,713 |  |  | 3,810 |  |  | 3,940 |  |  | 187 |  |  | 1,677 |  |  | 20,056 |
Property and equipment | 43 |  |  | 1,324 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,367 |
Other assets | — |  |  | 589 |  |  | 52 |  |  | — |  |  | — |  |  | 18 |  |  | 659 |
Intangible assets | 5,200 |  |  | 76,169 |  |  | 9,402 |  |  | 26,399 |  |  | 5,085 |  |  | 12,722 |  |  | 134,977 |
Goodwill | 15,026 |  |  | 109,053 |  |  | 45,810 |  |  | 32,251 |  |  | 22,797 |  |  | 10,592 |  |  | 235,529 |
Total assets acquired | 21,100 |  |  | 203,825 |  |  | 62,494 |  |  | 63,203 |  |  | 28,519 |  |  | 25,154 |  |  | 404,295 |
Premiums payable to insurance companies | (318) |  |  | (5,898) |  |  | (5,831) |  |  | — |  |  | — |  |  | — |  |  | (12,047) |
Producer commissions payable | (4) |  |  | (749) |  |  | — |  |  | (906) |  |  | (111) |  |  | (395) |  |  | (2,165) |
Accrued expenses and other current liabilities | (26) |  |  | (1,694) |  |  | (158) |  |  | (4) |  |  | (674) |  |  | (4) |  |  | (2,560) |
Total liabilities acquired | (348) |  |  | (8,341) |  |  | (5,989) |  |  | (910) |  |  | (785) |  |  | (399) |  |  | (16,772) |
Net assets acquired | $ | 20,752 |  |  | $ | 195,484 |  |  | $ | 56,505 |  |  | $ | 62,293 |  |  | $ | 27,734 |  |  | $ | 24,755 |  |  | $ | 387,523 |
Maximum potential contingent earnout consideration | $ | 8,500 |  |  | $ | 72,446 |  |  | $ | 77,554 |  |  | $ | 29,888 |  |  | $ | 26,402 |  |  | $ | 17,897 |  |  | $ | 232,687 |
The factors contributing to the recognition of the amount of goodwill are based on expanding business presence into new geographic locations and service markets, strategic benefits expected to be realized from acquiring the Partners’ assembled workforce and technology, in addition to other synergies gained from integrating the Partners’ operations into our consolidated structure. The intangible assets acquired in connection with business combinations during the nine months ended September 30, 2021 have the following values and estimated weighted-average lives:
(in thousands, except weighted-average lives) | Amount |  | Weighted-Average Life
Purchased customer accounts | $ | 117,200 |  |  | 18.1 years
Distributor relationships | 4,846 |  |  | 20.0 years
Software | 8,834 |  |  | 5.0 years
Trade names | 4,097 |  |  | 5.0 years
Future annual estimated amortization expense over the next five years for intangible assets acquired in connection with business combinations during the nine months ended September 30, 2021 is as follows:
(in thousands) |  | Amount
For the remainder of 2021 |  | $ | 2,220 |
2022 |  | 10,102 |
2023 |  | 10,425 |
2024 |  | 10,670 |
2025 |  | 10,904 |
The following unaudited pro forma consolidated results of operations are provided for illustrative purposes only and have been presented as if the acquisitions of LeaseTrack, Medicare Help Now, Only Medicare Solutions, Seniors’ Insurance Services, Mid-Continent, RogersGray, EBSME, FounderShield, The Capital Group and River Oak Risk occurred on January 1, 2020. This unaudited pro forma information should not be relied upon as being indicative of the historical results that would have been obtained if the acquisitions had occurred on that date, nor of the results that may be obtained in the future.
|  | For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
(in thousands, except per share data) |  | 2021 |  | 2020 |  | 2021 |  | 2020
Pro forma results: |  |  |  |  |  |  |  |
Revenues |  | $ | 137,830 |  |  | $ | 83,182 |  |  | $ | 446,454 |  |  | $ | 224,440 |
Net loss |  | (24,312) |  |  | (12,446) |  |  | (11,142) |  |  | (20,551) |
Net loss attributable to BRP Group, Inc. |  | (12,877) |  |  | (5,337) |  |  | (6,732) |  |  | (8,940) |
Basic and diluted loss per share |  | $ | (0.28) |  |  | $ | (0.16) |  |  | $ | (0.15) |  |  | $ | (0.36) |
Weighted-average shares of Class A common stock outstanding - basic and diluted |  | 46,633 |  |  | 33,835 |  |  | 45,589 |  |  | 25,106 |

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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