Acquisitions

6 Months Ended

Jun. 30, 2024

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

Effective July 1, 2023, Essent Holdings acquired all of the issued and outstanding shares of capital stock of Agents National Title Holding Company (“Agents National Title”) and the issued and outstanding membership interests of Boston National Holdings LLC (“Boston National Title”) for $92.6 million in cash in a single settlement with the seller. The purchase price was subject to further customary post-closing adjustments as described in a securities purchase agreement among the parties to the transaction, in which a post closing adjustment of $1.3 million was paid by the seller to Essent Holdings. The acquisition provides complementary products and services to our mortgage insurance business, adding a team of seasoned title professionals to Essent and providing a platform to leverage our capital, lender network and operational expertise in a well-established, adjacent real estate sector.

The acquired businesses contributed revenues of $37.2 million, principally comprised of $31.9 million of net premiums earned and $2.8 million of settlement services revenues, which are included in other income, and pre-tax net losses of $8.7 million to our results for the six months ended June 30, 2024.

We incurred $4.2 million of acquisition-related costs for the six months ended June 30, 2023. These expenses are included in other underwriting and operating expenses on our condensed consolidated income statement.

The acquisition of Agents National Title and Boston National Title was accounted for as a business combination using the acquisition method of accounting and, accordingly, the assets acquired, liabilities assumed and consideration transferred were recorded at their estimated fair values as of the acquisition date. The excess of consideration transferred over the fair value of net assets acquired was recorded as goodwill. The Company allocated the goodwill to its Title operating segment.

The following table summarizes the consideration transferred to acquire Agents National Title and Boston National Title and the amounts of identified assets acquired and liabilities assumed, including purchase accounting adjustments that have been recorded by Essent during the measurement period:


	Originally Reported		Measurement Period Adjustments		As Reported
Consideration Paid:
Cash	$	92,625	$	(1,315)	$	91,310
Assets Acquired:
Cash and cash equivalents	5,864		—		5,864
Short-term investments	21,108		—		21,108
Fixed maturities available for sale	9,668		—		9,668
Identifiable intangible assets	26,300		(3,400)		22,900
Other assets	16,366		(2,297)		14,069
Liabilities Assumed:
Reserve for losses	14,613		(464)		14,149
Other liabilities	10,399		6,512		16,911
Total Identifiable Net Assets	54,294		(11,745)		42,549
Goodwill	$	38,331	$	10,430	$	48,761

Adjustments to Goodwill were primarily related to the fair value of claims reserve liabilities, agency relationship intangible assets and other assets. The fair values of assets acquired and liabilities assumed, as well as resulting goodwill, were finalized as of June 30, 2024.

The amount of goodwill recorded reflects the increased market share and related synergies that are expected to result from the acquisition, and represents the excess purchase price over the estimated fair value of the net assets acquired from Agents National Title and Boston National Title. As of June 30, 2024, intangible assets were $21.5 million, net of $1.4 million of accumulated amortization.