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Fair Value Measurements and Financial Risk
 3 Months Ended
Mar. 31, 2025
Fair Value Disclosures [Abstract]  
Fair Value Measurements and Financial Risk
8.
Fair Value Measurements and Financial Risk

As of March 31, 2025, the Company’s assets and liabilities measured at fair value on a recurring basis are categorized in the table below:

(in millions)

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

40.2

 

 

$

40.2

 

 

$

—

 

 

$

—

 

Money market mutual funds(a)

 

 

236.6

 

 

 

236.6

 

 

 

—

 

 

 

—

 

Total assets at fair value

 

$

276.8

 

 

$

276.8

 

 

$

—

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Market-based share awards liability(b)

 

$

0.5

 

 

$

—

 

 

$

—

 

 

$

0.5

 

Contingent consideration(b)

 

 

18.5

 

 

 

—

 

 

 

—

 

 

 

18.5

 

Total liabilities at fair value

 

$

19.0

 

 

$

—

 

 

$

—

 

 

$

19.0

 

 

 

(a)
The Company’s money market mutual funds of $236.6 million as of March 31, 2025 are included within cash and cash equivalents in the condensed consolidated balance sheets. The money market mutual funds are traded in active markets and quoted in broker or dealer quotations and are classified as Level 1 assets. The fair value of the Company’s money market mutual funds is based on unadjusted quoted prices on the reporting date.
(b)
The market-based share awards liability of $0.5 million as of March 31, 2025 is included within other noncurrent liabilities in the condensed consolidated balance sheets. The fair value of the Company’s market-based share awards and contingent consideration are derived from valuation techniques in which one or more significant inputs are unobservable, including the Company’s own assumptions. Contingent consideration of $2.8 million as of March 31, 2025 is included within contingent consideration in the condensed consolidated balance sheets and contingent consideration of $15.7 million is included within other noncurrent liabilities in the condensed consolidated balance sheets.

As of December 31, 2024, the Company’s assets and liabilities measured at fair value on a recurring basis are categorized in the table below:

(in millions)

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

31.1

 

 

$

31.1

 

 

$

—

 

 

$

—

 

Money market mutual funds(a)

 

 

163.7

 

 

 

163.7

 

 

 

—

 

 

 

—

 

Total assets at fair value

 

$

194.8

 

 

$

194.8

 

 

$

—

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Market-based share awards liability(b)

 

$

0.5

 

 

$

—

 

 

$

—

 

 

$

0.5

 

Contingent consideration(b)

 

 

10.7

 

 

 

—

 

 

 

—

 

 

 

10.7

 

Total liabilities at fair value

 

$

11.2

 

 

$

—

 

 

$

—

 

 

$

11.2

 

 

(a)
The Company’s money market mutual funds are based on the closing price of these assets as of the reporting date. The fair value of the Company’s money market mutual funds is based on unadjusted quoted prices on the reporting date. The Company’s money market mutual funds are quoted in an active market and classified as Level 1 assets.
(b)
Included within other noncurrent liabilities in the consolidated balance sheet. The fair value of the Company’s market-based share awards and contingent consideration are derived from valuation techniques in which one or more significant inputs are unobservable, including the Company’s own assumptions.

Market-based Share Awards

The market-based share awards liability of $0.5 million as of March 31, 2025 and December 31, 2024, entitles the grantees of these awards the right to receive shares of common stock equal to a maximum cash value of $4.9 million, in the aggregate, upon achievement of specified targeted share prices measured over sixty days within a ninety-day trading period. The liability is measured at fair value and is re-measured to an updated fair value at each reporting period for the expected term. The Company recognizes stock-based compensation expense for awards subject to market-based vesting conditions regardless of whether it becomes probable that these conditions will be achieved. The stock-based compensation expense is included in selling, general and administrative expense in the condensed consolidated statements of income and comprehensive income. Refer to Note 10, Stock-Based Compensation, under the heading Market-based Share Awards for unobservable inputs for the market-based share award liability.

Contingent Consideration

The Company had contingent consideration liabilities measured at fair value related to the Company’s 2025, 2024, 2023 and 2022 acquisitions of $18.5 million and $10.7 million, as of March 31, 2025 and December 31, 2024, respectively. The contingent consideration liability of $18.5 million as of March 31, 2025 consists of liabilities of $2.8 million, $1.0 million, $11.5 million and $3.2 million that are expected to be settled in 2025, 2026, 2027 and 2028, respectively. The acquisition of Plant Based World during the first quarter of 2025 included contingent consideration, which had an initial estimated fair value of $0.5 million. Refer to Note 4, Business Acquisitions, for further information related to the contingent consideration related to the acquisition of Insurtech, which had an initial estimated fair value of $4.8 million.

The Company paid contingent consideration of $0.6 million during the three months ended March 31, 2025. Contingent consideration liabilities are re-measured to fair value each reporting period. As a result of the Company’s remeasurements during the first quarter of 2025, the Company recorded a $3.1 million increase in fair value of contingent consideration, which is included in selling, general and administrative expense in the condensed consolidated statements of income and comprehensive income. The change in fair value of the Company’s contingent consideration liabilities consists of the following activity:

 

 

Three Months Ended
March 31,

 

(in millions)

 

2025

 

Balance at December 31, 2024

 

$

10.7

 

Payment of contingent consideration

 

 

(0.6

)

Fair value remeasurement adjustments

 

 

3.1

 

Business acquisition

 

 

5.3

 

Balance at March 31, 2025

 

$

18.5

 

The determination of the fair value of the contingent consideration liabilities could change in future periods. Any such changes in fair value will be reported in selling, general and administrative expense in the condensed consolidated statements of income and comprehensive income.

Financial Risk

The Company’s condensed consolidated financial statements reflect estimates and assumptions made by management that affect the reported amount of assets and liabilities.