v3.22.2

Business Combinations (Notes) | Apr. 01, 2020
--- | ---
Business Combinations [Abstract] |
Business Combination Disclosure | Business Combinations The Company completed two business combinations for an aggregate purchase price of $396.4 million during the six months ended June 30, 2022. 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. For tax purposes, goodwill is deductible and will be amortized over a period of 15 years. The Company completed the following business combinations during the six months ended June 30, 2022: •Westwood Insurance Agency (“Westwood”), a MainStreet Partner effective April 29, 2022, enhances the Company’s expertise and capabilities in embedded, tech-enabled homeowners’ insurance solutions. •Venture Captive Management, LLC (“VCM”), a Specialty Partner effective June 3, 2022, expands the Company’s capabilities into captive management and alternative risk funding solutions for clients. The recorded purchase price for business combinations includes an estimation of the fair value of contingent consideration obligations associated with potential earnout provisions, which are based on recurring revenue or the insured value of sourced homeowners’ insurance of Westwood. 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 income (loss) when incurred. The recorded purchase price for certain 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. The operating results of these business combinations have been included in the condensed consolidated statements of comprehensive income (loss) since their respective acquisition dates. The Company recognized total revenues and net income from these business combinations of $18.2 million and $7.0 million, respectively, for each of the three and six months ended June 30, 2022. Acquisition-related costs incurred in connection with these business combinations are recorded in other operating expenses in the condensed consolidated statements of comprehensive income (loss). The Company incurred acquisition-related costs from these business combinations of $1.9 million for the six months ended June 30, 2022. 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. 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 six months ended June 30, 2022.
(in thousands) | Westwood |  | VCM |  | Totals
Cash consideration paid | $ | 373,554 |  |  | $ | 5,850 |  |  | $ | 379,404 |
Fair value of contingent earnout consideration | 12,724 |  |  | 674 |  |  | 13,398 |
Fair value of equity interest | — |  |  | 1,870 |  |  | 1,870 |
Deferred payment | — |  |  | 1,716 |  |  | 1,716 |
Total consideration | $ | 386,278 |  |  | $ | 10,110 |  |  | $ | 396,388 |
Cash | $ | 658 |  |  | $ | 1,397 |  |  | $ | 2,055 |
Restricted cash | 50 |  |  | — |  |  | 50 |
Premiums, commissions and fees receivable | 4,225 |  |  | 157 |  |  | 4,382 |
Other assets | 392 |  |  | 566 |  |  | 958 |
Intangible assets | 209,200 |  |  | 2,984 |  |  | 212,184 |
Goodwill | 176,176 |  |  | 6,865 |  |  | 183,041 |
Total assets acquired | 390,701 |  |  | 11,969 |  |  | 402,670 |
Premiums payable to insurance companies | (218) |  |  | — |  |  | (218) |
Producer commissions payable | (2,488) |  |  | — |  |  | (2,488) |
Accrued expenses and other current liabilities | (1,717) |  |  | (1,859) |  |  | (3,576) |
Total liabilities acquired | (4,423) |  |  | (1,859) |  |  | (6,282) |
Net assets acquired | $ | 386,278 |  |  | $ | 10,110 |  |  | $ | 396,388 |
Maximum potential contingent earnout consideration | $ | 15,000 |  |  | $ | 1,250 |  |  | $ | 16,250 |
The factors contributing to the recognition of goodwill are based on expanding business presence into new 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 six months ended June 30, 2022 have the following values and estimated weighted-average lives:
(in thousands, except weighted-average lives) | Amount |  | Weighted-Average Life
Purchased customer accounts | $ | 18,550 |  |  | 20.0 years
Distributor relationships | 159,800 |  |  | 20.0 years
Software | 29,500 |  |  | 5.0 years
Trade names | 4,334 |  |  | 5.0 years
Future annual estimated amortization expense over the next five years for intangible assets acquired in connection with business combinations during the six months ended June 30, 2022 is as follows:
(in thousands) |  | Amount
For the remainder of 2022 |  | $ | 5,049 |
2023 |  | 11,076 |
2024 |  | 12,340 |
2025 |  | 13,562 |
2026 |  | 14,437 |
The following pro forma consolidated results of operations are provided for illustrative purposes only and have been presented as if the acquisitions of Westwood and VCM occurred on January 1, 2021. This 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 June 30, |  | For the Six Months Ended June 30,
(in thousands, except per share data) |  | 2022 |  | 2021 |  | 2022 |  | 2021
Pro forma results: |  |  |  |  |  |  |  |
Revenues |  | $ | 239,912 |  |  | $ | 140,906 |  |  | $ | 503,058 |  |  | $ | 313,572 |
Net income (loss) |  | 15,753 |  |  | (21,759) |  |  | 60,370 |  |  | 8,970 |
Net income (loss) attributable to BRP Group, Inc. |  | 8,207 |  |  | (10,731) |  |  | 30,965 |  |  | 4,300 |
Basic earnings (loss) per share |  | $ | 0.15 |  |  | $ | (0.24) |  |  | $ | 0.55 |  |  | $ | 0.10 |
Diluted earnings (loss) per share |  | $ | 0.14 |  |  | $ | (0.24) |  |  | $ | 0.52 |  |  | $ | 0.09 |
Weighted-average shares of Class A common stock outstanding - basic |  | 56,339 |  |  | 44,768 |  |  | 56,079 |  |  | 44,561 |
Weighted-average shares of Class A common stock outstanding - diluted |  | 60,022 |  |  | 44,768 |  |  | 59,628 |  |  | 46,543 |

X
- 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 https://asc.fasb.org/topic&trid=2303972 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 5 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=128092470&loc=d3e4946-128472 + Details
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration