v3.26.1
Business Combination
 6 Months Ended
Jun. 30, 2026
Business Combination [Abstract]  
Business Combination

3. Business Combination

Atlantic House

Summary

As previously disclosed in Note 1, on May 1, 2026, the Company completed the Atlantic House acquisition. Pursuant to the Atlantic House Purchase Agreement, the purchase price consisted of £150,000 (approximately $200,000) in cash payable at closing, subject to customary post-closing adjustments, including adjustments to cash, indebtedness and working capital. After giving effect to such adjustments, the purchase consideration paid was £154,537 ($209,099).

Preliminary Purchase Price Allocation

The Atlantic House acquisition is accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations, which requires an allocation of the consideration paid by the Company to the identifiable assets and liabilities of Atlantic House based on the estimated fair values as of the closing date of the acquisition. Because the acquisition closed on May 1, 2026, the purchase price allocation is preliminary and subject to refinement as the Company completes its valuation of certain assets acquired and liabilities assumed. A preliminary allocation of the consideration paid is presented below and includes the Company’s preliminary estimates of the fair value of tangible and intangible assets acquired and liabilities assumed.

The following table summarizes the preliminary allocation of the purchase price as of the acquisition date:

Purchase consideration paid   $ 209,099  
Total purchase price   $ 209,099  
         
Allocation of consideration:        
Cash and cash equivalents   $ 11,611  
Other net tangible assets     444  
Intangible assets(1)     88,458  
Deferred tax liability(2)     (21,831 )
Fair value of net assets acquired   $

78,682

  
         
Goodwill resulting from the Atlantic House acquisition(3)   $ 130,417  

(1) Represents the preliminary purchase price allocation to management contracts ($70,776), customer relationships ($10,663), non-compete agreements ($4,724), trade names and trademarks ($1,350) and model distribution relationships ($945). Management contracts, customer relationships and model distribution relationships were valued using the multi-period excess earnings method based on the existing contractual rights, assets under management and customer relationships existing at the acquisition date. Significant unobservable inputs used to value the management contracts included a long-term revenue growth rate of 5.0%. The customer relationships and model distribution relationships included attrition assumptions of 15.0% and 10.0%, respectively. Trade names and trademarks were valued using the relief-from-royalty method assuming a royalty rate of 2.0%. Non-compete agreements were valued using the with-and-without method assuming probability of competition of 20.0%. See Note 21 for additional information, including the useful lives of these finite lived assets.
(2) The acquired goodwill and intangible assets are not deductible for income tax purposes. Accordingly, the purchase price allocation includes a deferred tax liability for the difference between the assigned fair values and tax bases of the identifiable intangible assets, resulting in a corresponding increase to goodwill.
(3) Goodwill arising from the Atlantic House acquisition primarily represents the expected future economic benefits associated with integrating Atlantic House’s investment management capabilities into the Company's existing business, including developing new products, broadening distribution through the Company’s existing U.S. and European sales channels and other future growth opportunities. Goodwill also includes the value attributable to the assembled workforce, which does not qualify for separate recognition.

Acquisition-related costs

The Company incurred acquisition-related costs associated with the Atlantic House acquisition of $1,118 and $3,051, respectively, during the three and six months ended June 30, 2026, the nature of which included professional advisor fees and stamp duty taxes.

Results of operations

Since the acquisition date of May 1, 2026, Atlantic House contributed revenues of $5,913 and income before taxes of $2,003 to the Company's consolidated results of operations for the three and six months ended June 30, 2026.

Ceres

Summary

On July 31, 2025, the Company and WisdomTree Farmland Holdings, LLC (formerly WisdomTree Farmland Holdings, Inc.), a wholly-owned subsidiary of the Company (the “Purchaser”), entered into an Equity Purchase Agreement (the “Ceres Purchase Agreement”) with Ceres, the members of Ceres (together, the “Sellers”), and an individual acting as the Sellers’ representative, pursuant to which the Purchaser agreed to acquire from the Sellers all of the issued and outstanding equity interests of Ceres, subject to the terms and conditions set forth therein.

On October 1, 2025, the Purchaser completed the Ceres acquisition for aggregate consideration consisting of (i) $275,000 in cash payable at closing subject to customary post-closing adjustments, including adjustments to cash, indebtedness and working capital, and (ii) earnout consideration of up to $225,000, payable in 2030, contingent upon Ceres achieving a compound annual growth rate (“CAGR”) in revenue of 12% to 22% during the earnout measurement period of January 1, 2025 through December 31, 2029.

Purchase Price Allocation

The Ceres acquisition is accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations, which requires an allocation of the consideration paid by the Company to the identifiable assets and liabilities of Ceres based on the estimated fair values as of the closing date of the acquisition. An allocation of the consideration paid is presented below and includes the Company’s valuation of the fair value of tangible and intangible assets acquired and liabilities assumed.

The following table summarizes the allocation of the purchase price as of the acquisition date:

Cash on hand, net of cash acquired   $ 270,346  
Fair value of contingent consideration(1)     11,134  
Total purchase price   $ 281,480  
         
Allocation of consideration:        
Ceres net liabilities assumed   $ (3,803 )
Intangible assets(2)     143,500  
Fair value of net assets acquired   $ 139,697  
         
Goodwill resulting from the Ceres acquisition(3)   $ 141,783  

(1) Measured at fair value using a Monte Carlo simulation. See below for additional information.
(2) Represents purchase price allocated to a customary advisory agreement ($135,000) and trade name ($8,500) which were determined to have a finite-life (estimated useful life of 25 years). The customary advisory agreement was valued using the multi-period excess earnings method. This method relied upon significant unobservable inputs including a long-term revenue growth rate of approximately (0.1%) and a discount rate of 15.5%. The revenue growth rate contemplates that Ceres Fund I, the fund from which the Company derives revenues, has ceased accepting new capital, with future business expected to be allocated to Ceres Fund II. The trade name is finite-lived (estimated useful life of 25 years) and was valued using the relief-from-royalty method. Significant unobservable inputs include a long-term revenue growth rate of approximately 3.0%, a royalty rate of 2.0% and a discount rate of 15.5%.
(3) Goodwill arising from the Ceres acquisition represents expected synergies from the integration of Ceres and the Company, including capital raising activities for a new farmland fund to be formed. Goodwill is not amortized for financial reporting purposes, and both goodwill and intangible assets are expected to be fully deductible for tax purposes.

Acquisition-related costs

The Company incurred acquisition-related costs associated with the Ceres acquisition of $1,967 during the three and six months ended June 30, 2025, the nature of which included professional advisor fees.

Supplemental Unaudited Pro Forma Financial Information

The following table presents unaudited supplemental pro forma financial information of the Company as if the Atlantic House and Ceres acquisitions had occurred on January 1, 2025. The unaudited pro forma financial information was derived from the historical financial results of the Company, Atlantic House and Ceres for all periods presented and was adjusted to give effect to pro forma adjustments that are directly attributable to the Atlantic House and Ceres acquisitions, factually supportable and expected to have a continuing impact on the combined results following the acquisitions.

    Three Months Ended     Six Months Ended  
    June 30, 2026     June 30, 2025     June 30, 2026     June 30, 2025  
Revenue   $ 180,476     $ 130,124     $ 349,368     $ 253,053  
Net income(1)   $ 46,894     $ 24,196     $ 27,282     $ 47,682  
(1) Includes $2,400 of intangible amortization expense (net of income taxes) for the three months ended June 30, 2026 and 2025, and $4,800 of intangible amortization expense (net of income taxes) for the six months ended June 30, 2026 and 2025, respectively.

Significant adjustments reflected in the unaudited pro forma financial information include amortization expense associated with the acquired identifiable intangible assets, interest expense associated with acquisition financing, the elimination of nonrecurring acquisition-related costs directly attributable to the acquisitions, and the related income tax effects of the pro forma adjustments.

The unaudited supplemental pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved had the Atlantic House and Ceres acquisitions occurred on January 1, 2025, nor is it necessarily indicative of future operating results.