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
On May 27, 2025, Kestrel LLC completed the business combination with Maiden, pursuant to the terms of the Combination Agreement. The equityholders of Kestrel LLC at the closing date received an aggregate of $40,000 in upfront cash and 2,749,996 common shares of the combined company. In addition, the former equityholders of Kestrel LLC remain entitled to receive contingent consideration up to the lesser of (x) $45,000 payable in common shares of Kestrel Group upon the achievement of certain financial milestones during the Performance Period, and (y) 2,750,000 common shares of Kestrel Group. After the closing of the Combination Agreement, the group was rebranded as Kestrel Group and is the successor company to Maiden. The Company’s authorized share capital consists of 42,500,000 shares.
The Combination was accounted for as a business combination in accordance with ASC 805, which requires assets acquired and liabilities assumed to be measured at their acquisition date fair value. The Company also adopted ASU 2021-08, effective as of January 1, 2025, to record contract liabilities at their carrying value as of the acquisition date. Although Maiden was the legal acquirer, Kestrel LLC was determined to be the accounting acquirer and the legal acquiree. As a result, Kestrel LLC and its subsidiaries’ net assets were carried at historical value, acquired net assets of Maiden and its subsidiaries were measured at fair value except contract liabilities being recorded at carrying value at the acquisition date, and results of operations of Maiden and its subsidiaries were included in the Company’s Condensed Consolidated Financial Statements from May 27, 2025.
Purchase Price and Purchase Price Allocation
Management performed a fair valuation of Maiden and its subsidiaries' assets and liabilities as of May 27, 2025. The fair values of the assets and liabilities acquired were based on discussions with Maiden’s management, valuation studies, the transaction due diligence, and information presented in Maiden’s SEC filings. The final purchase price and purchase price allocation herein may be different than the information previously filed with the SEC, and such differences could be material.
Purchase Price
The final purchase price was based on the fair value of the issued and outstanding common shares at the closing of the Combination on May 27, 2025. The following table summarizes the final purchase price as of May 27, 2025:
Kestrel Group Ltd shares issued at Closing7,221,621 
Kestrel Group Ltd share price$23.00 
Gross equity portion of consideration transferred at Closing$166,097 
Kestrel Group Ltd shares retained as treasury shares by Maiden Reinsurance at Closing(2,237,534)
Kestrel Group Ltd share price$23.00 
Equity portion of consideration transferred to Maiden Reinsurance$(51,463)
Net equity portion of consideration transferred at Closing$114,634 
Cash consideration paid to shareholders at Closing for fractional shares1 
Portion of the Maiden awards attributable to pre-combination service514 
 Intercompany settlement 388 
Total consideration effectively transferred$115,537 
At the closing date on May 27, 2025, the fair value of Maiden's net assets acquired were $183,843 which exceeded the consideration effectively transferred of $115,537, resulting in a final bargain purchase gain of $68,306 as shown in the table on the next page, and recognized in the Company's Consolidated Statement of Operations in the year ended December 31, 2025. The gain on bargain purchase of $73,590 recognized in the three and six months ended June 30, 2025 was the differential between the estimated fair value of net assets of Maiden acquired on May 27, 2025 and the equity consideration effectively transferred to Maiden shareholders on that date based on the initial assessment of fair values acquired.
As discussed in Part II, Item 8. Notes to Consolidated Financial Statements: Note 17. Business Combination included in the Company's Form 10-K filed on March 13, 2026, the fair value of net acquired assets of Maiden had a decrease of $5,284 from the provisional fair value on May 27, 2025 due to updated information for certain underlying investment assets and was recorded against the estimated gain on bargain purchase recognized for the year ended December 31, 2025.
As discussed in Note 11. Commitments, Contingencies and Guarantees, Kestrel Equityholders are entitled to receive in contingent consideration up to the lesser of (x) an aggregate number of Kestrel Group common shares equal to $45,000 divided by certain volume weighted average prices of such shares, subject to the achievement of certain EBITDA milestones by the businesses that Kestrel conducted immediately prior to closing and any extensions of such businesses or related or ancillary businesses existing thereafter, subject to other terms and conditions as set forth in the combination agreement and (y) 2,750,000 common shares of Kestrel Group.
14. Business Combination (continued)
On June 30, 2026, the fair value of this contingent consideration was $0 as business subject to the earn out consideration computation continues to be re-evaluated based upon current estimates of the Kestrel business for the Performance Period, including performance of the Program Services business through June 30, 2026. There was no change in the fair value of the earn out liability for the three and six months ended June 30, 2026, compared to an increase of $2,679 for the three and six months ended June 30, 2025, respectively, which was recorded in the condensed consolidated statement of operations.
Final Purchase Price Allocation
The following table summarizes final allocation of the purchase price to the assets acquired and liabilities assumed as of May 27, 2025:
Fixed maturities, available-for-sale, at fair value$208,855 
Equity securities, at fair value11,144 
Equity method investments32,326 
  Other investments
160,439 
  Cash and cash equivalents68,358 
  Restricted cash and cash equivalents11,449 
  Accrued investment income4,108 
Reinsurance balances receivable, net
10,133 
Reinsurance recoverable on unpaid losses
517,028 
  Net loan receivable from related party107,110 
Intangible assets11,864 
Funds withheld receivable
11,048 
  Other assets14,592 
Assets held for sale20,698 
Reserve for loss and loss adjustment expenses(738,137)
Unearned premiums (23,903)
Accrued expenses and other liabilities(68,453)
   Senior notes - at fair value(173,669)
Liabilities held for sale(1,147)
Net assets183,843 
Bargain purchase gain(68,306)
Total consideration effectively transferred$115,537 
In connection with the Combination on May 27, 2025, the assets and liabilities of Maiden were recorded at fair value measured as of the acquisition date. Therefore, the net reserves for losses and LAE were remeasured at fair value, and based on discounted cash flow valuation techniques, a discount to net loss reserves was required which was recorded in intangible assets. At the closing date of May 27, 2025, the intangible assets acquired also consist of the value of business acquired ("VOBA"). The following table presents the weighted average amortization period and other components of intangible assets acquired at May 27, 2025 and June 30, 2026. Accumulated amortization for the intangible assets was $4,188 at June 30, 2026:

 
Weighted Average Amortization PeriodMay 27, 2025
Accumulated Amortization at June 30, 2026
June 30, 2026
Value of Business Acquired5.0 years$2,207 $(806)$1,401 
Fair value discount on net reserves acquired 32.0 years9,657 (3,382)6,275 
Total Intangible Assets 27.3 years$11,864 $(4,188)$7,676 
The aggregate amortization expense for intangible assets was $833 and $1,671 for the three and six months ended June 30, 2026 (2025: $426). This included $646 and $1,445 of amortization for the fair value on net reserves acquired reported in general and administrative expenses (2025: $302) and $187 and $226 of amortization on the fair value of business acquired reported in commission and other acquisition expenses (2025: $124).
14. Business Combination (continued)
The following table presents the estimated aggregate amortization expense for the five succeeding fiscal years on intangible assets held at June 30, 2026:
 
20262027202820292030
Amortization expense: VOBA$504 $476 $247 $102 $72 
Amortization expense: fair value discount on net reserves acquired753 1,413 1,243 1,066 632 
Total amortization expense$1,257 $1,889 $1,490 $1,168 $704