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Business Combinations (Notes) | 6 Months Ended
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Jun. 30, 2025
Business Combination [Abstract] |
Business Combination | The Company completed one business combination for an aggregate purchase price of $24.6 million during the six months ended June 30, 2025. 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 acquired certain assets and equity interests of entities used in the operation of Bermuda-based reinsurance underwriting platform MultiStrat Group (“MultiStrat”), an Underwriting, Capacity & Technology Solutions partner effective April 1, 2025, to add an important capability to source alternative reinsurance capital for Baldwin’s cedant clients and MSI, without taking balance sheet risk. The recorded purchase price for the MultiStrat partnership includes an estimation of the fair value of contingent earnout obligations associated with contractual earnout provisions providing for post-closing contingent consideration payments, which are based on revenue, revenue growth and net income (loss) before interest, taxes, depreciation, amortization, and one-time transactional-related expenses or non-recurring items (“adjusted EBITDA”) growth. The contingent earnout consideration amounts identified in the table 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 the MultiStrat partnership 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 the MultiStrat partnership have been included in the condensed consolidated statements of comprehensive income (loss) since the acquisition date. The Company recognized total revenues and net income from the MultiStrat partnership of $2.0 million and $0.1 million, respectively, for each of the three and six months ended June 30, 2025. Acquisition-related costs incurred in connection with the MultiStrat partnership are recorded in other operating expenses in the condensed consolidated statements of comprehensive income (loss). The Company incurred acquisition-related costs from this business combination of $0.4 million during the six months ended June 30, 2025. 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 the fair value of contingent earnout consideration and intangible assets are estimates based on assumptions of factors such as discount rates and growth rates. Accordingly, these assets and liabilities 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 the MultiStrat partnership.
(in thousands) | MultiStrat |  |  |  |
Cash consideration paid | $ | 12,054 |  |  |  |  |
Fair value of contingent earnout consideration | 8,766 |  |  |  |  |
Fair value of equity interest | 863 |  |  |  |  |
Deferred payment | 2,901 |  |  |  |  |
Total consideration | $ | 24,584 |  |  |  |  |
Cash | $ | 355 |  |  |  |  |
Assumed premiums, commissions and fees receivable | 12,190 |  |  |  |  |
Other assets | 1,687 |  |  |  |  |
Intangible assets | 4,460 |  |  |  |  |
Goodwill | 8,214 |  |  |  |  |
Total assets acquired | 26,906 |  |  |  |  |
Accrued expenses and other current liabilities | (2,322) |  |  |  |  |
Total liabilities acquired | (2,322) |  |  |  |  |
Net assets acquired | $ | 24,584 |  |  |  |  |
Maximum potential contingent earnout consideration | $ | 16,500 |  |  |  |  |
The factors contributing to the recognition of goodwill are based on expanding the Company’s business product offerings and vertical integration within the reinsurance industry. The intangible assets acquired in connection with the MultiStrat partnership have the following values and estimated weighted-average lives:
(in thousands, except weighted-average lives) | Amount |  | Weighted-Average Life
Acquired relationships | $ | 3,527 |  |  | 10 years
Trade names | 196 |  |  | 3 years
Software(1) | 737 |  |  |
__________ (1) Software acquired in the MultiStrat partnership consists of internally-developed software, which will not be placed in service and amortized until it reaches technological feasibility. Future annual estimated amortization expense for the next five years is as follows for intangible assets acquired in connection with the MultiStrat partnership:
(in thousands) |  | Amount
For the remainder of 2025 |  | $ | 209 |
2026 |  | 418 |
2027 |  | 418 |
2028 |  | 369 |
2029 |  | 353 |
2030 |  | 353 |

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