v3.25.2
Note 6 - Acquisitions
 6 Months Ended
Jun. 30, 2025
Notes to Financial Statements  
Business Combination [Text Block]

6. Acquisitions:

 

2025 Acquisitions

 

On  April 2, 2025, we completed the acquisition of 100 percent of the stock of Nasdaq subsidiary Simplitium Limited ("Simplitium"), for a cash purchase price of $19.7 million. The acquisition will provide Verisk clients with access to 300+ third-party models, providing unique, niche views of risk across the globe. The acquisition will further our expansion in Europe and the Company’s goal of helping insurers and claims service providers leverage more holistic data and technology tools to enhance the claims experience.

 

The preliminary purchase price allocation of the 2025 acquisition resulted in the following:

 

  

Simplitium

 

Cash and cash equivalents

 $0.3 

Accounts receivable

  3.4 

Prepaid assets

  0.6 

Intangible assets

  9.8 

Goodwill

  11.9 

Total assets acquired

  26.0 

Accounts payable and accrued liabilities

  0.7 

Deferred revenues

  2.7 

Income tax payable

  0.1 

Deferred income tax liability

  2.5 

Total liabilities assumed

  6.0 

Net assets acquired

 

20.0

 

Less: cash acquired

  0.3 

Net cash purchase price

 $19.7 

 

The preliminary amounts assigned to intangible assets by type for the 2025 acquisition are summarized in the table below:

 

  

Weighted Average Useful Life (in years)

  

Total

 

Technology-based

  5  $2.5 

Marketing-related

  5   0.1 

Customer-related

  13   7.2 

Total intangible assets

     $9.8 

 

 

The preliminary allocations of the purchase price for the 2025 acquisition with less than a year of ownership are subject to revisions as additional information is obtained about the facts and circumstances that existed as of each acquisition date. The revisions may have a significant impact on our condensed consolidated financial statements. The allocations of the purchase price will be finalized once all the information that was known as of the acquisition date is obtained and analyzed, but not to exceed one year from the acquisition date. The primary areas of the purchase price allocation that are not yet finalized relate to income and non-income taxes, deferred revenues, the valuation of intangible assets acquired, and residual goodwill. The goodwill associated with our acquisition includes the acquired assembled workforce, the value associated with the opportunity to leverage the work force to continue to develop the technology and content assets, as well as our ability to grow through adding additional customer relationships or new solutions in the future. The  $11.9 million in goodwill associated with our acquisitions, is not deductible for tax purposes. The preliminary amounts assigned to intangible assets by type for these acquisitions were based upon our valuation model and historical experiences with entities with similar business characteristics.

 

For the three and six months ended June 30, 2025 and 2024, we incurred transaction costs of $0.1 million and $0.0 million, and $0.9 million and $0.1 million, respectively. The transaction costs were included within "Selling, general and administrative" expenses in our accompanying condensed consolidated statements of operations. The 2025 acquisition was immaterial to our condensed consolidated statement of operations for the three and six months ended  June 30, 2025 and 2024, and therefore, supplemental information disclosure on an unaudited pro forma basis is not presented.

 

Acquisition Escrows and Related Liabilities

 

As of June 30, 2025, the acquisition of Morning Data Limited ('Morning Data') included an acquisition-related contingent payment, for which the sellers of these acquisitions could receive additional payments by achieving the specific predetermined revenue, EBITDA margin, and/or Cash EBITDA earn-out targets for exceptional performance. We believe that the liabilities recorded as of  June 30, 2025 and  December 31, 2024 reflect the best estimate of acquisition-related contingent payments. There was no associated current portion of the contingent payments as of  June 30, 2025 and  December 31, 2024. The associated noncurrent portion of acquisition-related contingent payments was $0.6 million and $2.2 million as of  June 30, 2025 and  December 31, 2024, respectively.