v3.26.1
Business Combination
 6 Months Ended
Jun. 30, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Business Combination Business Combination
Rivington Acquisition
On April 7, 2025, Federated Hermes Limited (FHL) acquired a majority (60%) equity interest in Rivington Energy (Management) Limited (Rivington), a United Kingdom (U.K.)-based renewable energy project development business, from its founding shareholders (Sellers). The acquisition provides an opportunity to further accelerate Federated Hermes’ growth in markets outside of the U.S.
The share purchase agreement provided for an upfront cash payment of £23.6 million ($30.0 million) for the majority (60%) equity interest in Rivington. The upfront cash payment included £12.9 million ($16.4 million) paid to Rivington for newly issued shares principally to provide funds for growth capital and debt repayment. The share purchase agreement also provides for a series of contingent purchase price payments, which can total as much as £10.7 million ($13.6 million) in the aggregate, with an estimated fair value as of the acquisition date of £2.1 million ($2.7 million), based on meeting certain revenue thresholds over the next three years. The share purchase agreement and other related transaction documents contain certain negotiated warranties, covenants and other terms customary for similar transactions in the U.K.
FHL and Sellers entered into an arrangement pursuant to the Shareholders’ Agreement relating to Rivington, which grants FHL the right to exercise a call option to acquire Sellers’ remaining 40% interest in Rivington at fair value between January 1, 2026 and December 31, 2033 and grants Sellers a right to exercise a put option to sell their remaining interest in Rivington to FHL at fair value between January 1, 2029 and December 31, 2033. Federated Hermes has determined that Sellers’ remaining 40% interest is temporary equity due to it being redeemable at the option of either FHL or Sellers, and therefore is not entirely in Federated Hermes’ control.
Federated Hermes performed a valuation of the fair value of the Rivington acquisition. The following table summarizes the final purchase price allocation determined as of the acquisition date:
(in millions)
Cash and Cash Equivalents $17.8 
Goodwill1
35.6 
Intangible Assets2
4.6 
Other Assets5.9 
Less: Liabilities Assumed(9.4)
Less: Fair Value of Redeemable Noncontrolling Interest in Subsidiary3
(21.8)
Total Purchase Price Consideration$32.7 
1    The goodwill recognized is attributable to enhanced revenue and growth opportunities from future projects and the assembled workforce of the Rivington business and is not deductible for tax purposes.
2    Intangible Assets are made up of customer contracts with an estimated useful life of 8.5 years and is recorded in Intangible Assets, net on the Consolidated Balance Sheets.
3    The fair value of the noncontrolling interest was determined utilizing the market approach and consideration of the overall business enterprise value.
FCP Acquisition
On April 9, 2026, Federated Hermes completed the acquisition of an 80% interest in FCP Fund Manager, L.P. (FCP), a U.S.-based real estate investment manager. The transaction included $216.0 million in cash consideration and Federated Hermes Class B common stock with a fair value of $23.1 million that was issued at closing to the selling parties, as well as opportunities for the selling parties to earn contingent consideration of up to an aggregate of $82.0 million over multiple year periods, based on achieving certain financial thresholds. This transaction aligns with Federated Hermes’ strategy to expand its private markets and alternatives capabilities in the U.S.
Beginning after the fifth anniversary of the closing, Federated Hermes will have certain call option rights to require the selling parties to sell their interests in FCP to Federated Hermes, and the selling parties will have certain put option rights to require Federated Hermes to acquire their interests in FCP. Federated Hermes has determined that the selling parties’ remaining 20% interest is temporary equity due to it being redeemable at the option of either Federated Hermes or the selling parties, and therefore is not entirely in Federated Hermes control.
Federated Hermes has expensed $16.0 million in transaction costs directly attributable to the FCP acquisition. Of this amount, $6.2 million and $3.3 million was expensed in 2026 and 2025, respectively, primarily recorded in Professional Service Fees and $6.5 million was expensed in 2026 in Compensation and Related expense on the Consolidated Statements of Income.
Federated Hermes performed a valuation of the fair value of the FCP acquisition. Due to the timing of the acquisition and status of the valuation work, the purchase price allocation for all assets and liabilities acquired is preliminary. Although preliminary results of the valuation are reflected in the Consolidated Financial Statements as of June 30, 2026 and for the three and six months then ended, the final purchase price allocation may reflect adjustments to this preliminary valuation and such adjustments may be material.
The following table summarizes the preliminary purchase price allocation determined as of the acquisition date:
(in millions)
Cash and Cash Equivalents$3.0 
Goodwill1
231.7 
Intangible Assets2
102.8 
Other Assets17.4 
Less: Liabilities Assumed(13.9)
Less: Fair Value of Redeemable Noncontrolling Interest in Subsidiary3
(68.2)
Total Purchase Price Consideration$272.8 
1    The goodwill recognized is attributable to revenue and growth opportunities from real estate funds and the assembled workforce of the FCP business and is deductible for tax purposes.
2    Intangible Assets are made up of a trade name, customer contracts and institutional investor relationships and are recorded in Intangible Assets, net on the Consolidated Balance Sheets.
3    The fair value of the noncontrolling interest was determined utilizing the market approach and consideration of the overall business enterprise value.