Business Combinations & Dispositions

12 Months Ended

Dec. 31, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Note 12. Business Combinations & Dispositions

During 2024, 2023, and 2022, we completed one business disposition and several business combination transactions. The purpose of each of the acquisitions during 2023 and 2022 was to expand the scope and nature of our product and service offerings, obtain new customer acquisition channels, add additional team members with important skillsets, and realize synergies. The aggregate transaction costs associated with these acquisition transactions were $0.1 million and $2.1 million during the years ended December 31, 2023, and 2022, respectively, and are included in general and administrative expenses on the Consolidated Statements of Operations and Comprehensive Loss. The results of operations for each acquisition are included in our consolidated financial statements from the date of acquisition onwards. The fair values assigned to tangible and intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions.

2024 Disposition

On January 31, 2024, we sold our insurance agency, Elite Insurance Group (“EIG”). The sale price was $12.2 million of which we have received $10.9 million in cash and recorded a receivable of $1.2 million as of December 31, 2024. We recorded a loss on sale of $5.3 million in other income, net, in the Consolidated Statements of Operations and Comprehensive Loss.

2023 Acquisitions

The acquisitions of the Florida and California operations of Residential Warranty Services (“RWS”) were closed on March 17, 2023. All other RWS operations were acquired in 2022 as discussed below. We paid approximately $2.1 million in cash to acquire $0.2 million of cash and current assets and $0.2 million of customer relationships with an estimated useful life of three years. The estimated value of the customer relationships intangible asset was calculated using the income approach.

The aggregate transaction costs of $0.1 million are primarily comprised of legal and due diligence fees and are included in general and administrative expenses on the Consolidated Statements of Operations and Comprehensive Loss. The results of operations for each acquisition are included in the Insurance segment in our consolidated financial statements from the date of acquisition onwards.

2022 Acquisitions

The following table summarizes the total consideration and the estimated fair value of the assets acquired and liabilities assumed for business combinations during 2022:


	Weighted Average Useful Life (in years)	RWS		Other		Total
Purchase consideration:
Cash		$	25,572	$	13,763	$	39,335
Issuance of common stock		3,552		—		3,552
Holdback liabilities and amounts in escrow		1,000		1,500		2,500
Contingent consideration - liability-classified		8,700		—		8,700
Total purchase consideration:		$	38,824	$	15,263	$	54,087
Assets:
Cash, cash equivalents and restricted cash		$	2,030	$	256	$	2,286
Current assets		525		7		532
Property and equipment		497		—		497
Operating lease right-of-use assets		871		—		871
Intangible assets:
Customer relationships	8	13,860		2,750		16,610
Acquired technology	5	500		1,480		1,980
Trademarks and tradenames	9	400		200		600
Non-competition agreements	7	180		20		200
Goodwill		27,366		10,698		38,064
Total assets acquired		46,229		15,411		61,640
Current liabilities		(6,869)		(148)		(7,017)
Operating lease liabilities, non-current		(536)		—		(536)
Net assets acquired		$	38,824	$	15,263	$	54,087

RWS

On April 1, 2022, we entered into a stock and membership interest purchase agreement with RWS to acquire its home warranty and inspection software and services businesses. On this date, we completed the acquisition of substantially all of RWS’ operations except for those in Florida and California, which were acquired in 2023. The aggregate consideration, subject to certain closing adjustments, for the 2022 RWS acquisitions was $38.8 million, including $25.6 million in cash, $1.0 million held in escrow for two years to satisfy potential indemnifications, $3.6 million of our common stock, and $8.7 million in contingent consideration based on specific metrics.

The purposes of the acquisition were to expand the scope and nature of our service offerings, add team members with important skillsets, and realize synergies. Goodwill is expected to be deductible for tax purposes.

The following table summarizes the fair value of the intangible assets of RWS as of the date of the acquisition.


	Fair Value		Estimated Useful Life (in years)
Intangible assets:
Customer relationships	$	13,860	8
Acquired technology	500		3
Trademarks and tradenames	400		9
Non-competition agreements	180		7
	$	14,940

The weighted-average amortization period for the acquired intangible assets is 7.7 years.

The estimated fair value of the customer related intangible assets was calculated through the income approach using the multi-period excess earnings methodology. The estimated fair value of the trademarks and tradenames were calculated through the income approach using the relief from royalty methodology. The estimated fair value of the acquired internally developed and used technology was derived using the cost approach considering the estimated costs to replicate existing

software. The estimated fair value of the non-competition agreement was calculated through the income approach using the with and without method over the contractual term of the agreement.

Other Acquisitions

During 2022, we completed one or more acquisitions which were not material to the consolidated financial statements. The purpose of any such acquisition, may include without limitation, to expand the scope and nature of our services offerings, add additional team members with important skillsets, and/or realize synergies. Goodwill of $10.7 million is deductible for tax purposes.

Pro forma results of operations have not been presented because the effects of 2022 acquisitions, individually and in the aggregate, were not material to our consolidated results of operations.