Filing Summary
Registrant: BRP Group, Inc. (the filing text does not identify the company as Baldwin Insurance Group, Inc.)
Report date: September 10, 2021; signed September 13, 2021. The filing primarily reports acquisitions, related unregistered equity issuances, Regulation FD disclosures, and unaudited pro forma financial information.
Business Context and Reporting Period
- BRP Group subsidiaries agreed to acquire substantially all assets of Jacobson, Goldfarb & Scott, Inc. and related entities, plus all outstanding equity interests of Preferred Property Program, Inc. and Preferred Property Risk Purchasing Group, Inc., collectively referred to as JGS.
- The JGS transaction was expected to close on October 1, 2021, subject to closing conditions.
- Exhibit 99.1 provides unaudited pro forma condensed consolidated financial information as of June 30, 2021, for the six months ended June 30, 2021, and for the year ended December 31, 2020. The filing text does not reproduce the pro forma revenue, profit, cash flow, balance-sheet, or margin figures.
Key Financial Metrics and Transaction Consideration
| Item | Amount or detail |
|---|---|
| JGS upfront cash consideration | Approximately $163.2 million, subject to reduction for the value of certain Class A shares granted to new colleagues |
| JGS equity consideration | 1,821,625 BRP LLC units and corresponding 1,821,625 shares of Class B common stock; each unit may be redeemed for one Class A share, subject to contractual restrictions |
| JGS contingent consideration | Up to approximately $92.9 million, based primarily on post-closing revenue measures; payable in cash, Class A shares, or a combination at the buyers’ option |
| JGS Acquired Revenue | $43.3 million for the most recent 12-month period before acquisition, based on quality-of-earnings reviews |
| EBSME acquisition | Completed July 30, 2021; approximately $3.0 million cash, 28,861 Class A shares, and contingent consideration of up to $7.4 million |
| EBSME Acquired Revenue | $1.2 million at acquisition |
| River Oak acquisition | Completed August 4, 2021; approximately $19.0 million cash, 179,845 Class A shares, and contingent consideration of up to $26.4 million |
| River Oak Acquired Revenue | $2.1 million at acquisition |
| MGA of the Future policies in force | 652,666 at September 13, 2021, compared with 605,295 at June 30, 2021 |
The filing text does not provide clear values for consolidated revenue, net income or loss, operating cash flow, margins, total debt, or liquidity.
Material Changes Versus Prior Comparable Period
- BRP Group reported a 7.8% increase in MGA of the Future policies in force from June 30, 2021 to September 13, 2021, based on the disclosed counts.
- Two acquisitions were completed after June 30, 2021: EBSME on July 30 and River Oak on August 4.
- BRP Group entered into the JGS Purchase Agreement on September 10, 2021, adding substantial expected cash, equity, and contingent consideration obligations.
- The filing does not provide historical-period income statement or cash flow amounts sufficient to quantify broader operating changes.
Guidance, Outlook, Risks, and Unusual Items
- BRP Group expects to close partner acquisitions generating approximately $175 million to $200 million of Acquired Revenue in 2021, with remaining 2021 partnerships expected to close in the fourth quarter.
- For 2022, management expects approximately $100 million to $150 million of Acquired Revenue, distributed among fiscal quarters in a pattern similar to 2021.
- Acquisition closings remain subject to conditions, and contingent consideration depends primarily on post-closing revenue performance.
- The securities issued or to be issued in connection with the transactions were offered in private transactions without underwriters or general solicitation and were intended to qualify for the Securities Act Section 4(a)(2) exemption. Transfer restrictions apply.
- Forward-looking results may be affected by acquisition execution, the Partnership pipeline, debt obligations and related restrictions, liquidity, operating performance, COVID-19 effects, and other risks disclosed in BRP Group’s SEC filings.
Investor Verification Items
- Review Exhibit 99.1 for the actual pro forma revenue, earnings, assets, liabilities, debt, and liquidity effects of the acquisitions.
- Confirm whether the JGS transaction closed on or around October 1, 2021 and determine the final cash and equity consideration.
- Monitor the revenue-based conditions governing the EBSME, River Oak, and JGS contingent consideration.
- Assess dilution and transfer restrictions associated with BRP LLC units and Class A and Class B shares.
- Compare subsequent filings with the disclosed 2021 and 2022 Acquired Revenue outlook and acquisition pipeline.