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Acquisitions | 3 Months Ended
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Mar. 31, 2022
Business Combination and Asset Acquisition [Abstract] |
Acquisitions | Acquisitions Effective January 1, 2022, the Company acquired all the equity interests in Madison National pursuant to a Stock Purchase Agreement (Agreement) dated as of July 14, 2021. The adjusted purchase price of the transaction was $172.3 million. The seller of Madison National has a potential earn-out of up to $12.5 million payable in cash, if specified financial targets are achieved by the end of 2023. The adjusted purchase price is subject to finalization within 165 days of the acquisition date pursuant to the terms of the Agreement. As a result of the acquisition, Madison National became a wholly owned subsidiary of the Company. Madison National is a leading writer of employer-sponsored benefits provided to educators by K-12 school districts. Founded in 1961 and headquartered in Madison, Wisconsin, Madison National offers short- term and long-term group disability, group term life, and worksite solutions products, including accident and critical illness. Madison National's results are being reported in the operating segment titled "Supplemental & Group Benefits". The amount of revenues and pretax loss for Madison National since the date of acquisition included in the Company's Consolidated Statement of Operations for the three months ended March 31, 2022 are $40.0 million and $(0.7) million (inclusive of the $1.2 million non-cash impact from amortization of intangible assets under purchase accounting), respectively. The Company has not yet completed the process of estimating the fair value of Madison National assets acquired and liabilities assumed, including, but not limited to, intangible assets, policy reserves and certain tax-related balances. Accordingly, the Company’s preliminary estimates and the allocation of the adjusted purchase price to the assets acquired and liabilities assumed are subject to change as the Company completes the process. In accordance with Accounting Standards Codification (ASC) 805, Business Combinations, changes if any, to the preliminary estimates and allocation of the adjusted purchase price will be reported in the Company’s financial statements as an adjustment to the opening balance sheet. Based on the Company’s preliminary allocation of the adjusted purchase price, the fair values of the assets acquired and liabilities assumed were as follows:
($ in millions) |  |
Assets: |  |
Investments |  | $ | 90.4 |
Cash and short-term investments |  | 123.4 |
Reinsurance recoverable |  | 356.0 |
Intangible assets(1) |  | 59.4 |
Other assets |  | 23.2 |
Liabilities: |  |
Investment contract and policy reserves |  | 274.5 |
Unpaid claims and claim expenses |  | 48.2 |
Unearned premiums |  | 1.5 |
Other policyholder funds |  | 152.8 |
Other liabilities |  | 15.9 |
Total identifiable net assets acquired |  | 159.5 |
Goodwill(2) |  | 12.8 |
Purchase price |  | $ | 172.3 |
(1) Intangible assets consist of the value of business acquired, value of customer relationships and state licenses. The intangible assets that are amortizable have estimated lives of one to ten years. See Note 5 for further information. (2) The amount of goodwill that is expected to be deductible for federal income tax purposes is $18.6 million.

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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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