Annual report pursuant to Section 13 and 15(d)

Acquisitions (Tables)

v3.22.4
Acquisitions (Tables)
 12 Months Ended
Dec. 31, 2022
Business Combination and Asset Acquisition [Abstract]  
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed
The following table summarizes the fair value of consideration transferred, noncontrolling interest equity value, assets acquired, and liabilities assumed in conjunction with the Business Combination (in thousands):
Consideration transferred:
Total cash consideration $ 342,270 
Blocker rollover equity 221,811 
Seller earnout contingent consideration (1)
160,272 
Tax receivable agreement obligations to the seller 31,950 
Total consideration transferred 756,303 
Noncontrolling interest 1,658,545 
Total equity value $ 2,414,848 
Assets acquired:
Cash and cash equivalents $ 336,075 
Restricted cash 305,292 
Loans held for investment, subject to HMBS related obligations, at fair value 10,071,192 
Loans held for investment, subject to nonrecourse debt, at fair value 5,291,443 
Loans held for investment, at fair value 1,100,544 
Loans held for sale, at fair value 2,140,361 
MSR, at fair value 267,364 
Fixed assets and leasehold improvements, net 26,079 
Intangible assets, net (2)
717,700 
Other assets, net 404,864 
Total assets acquired $ 20,660,914 
Liabilities assumed:
HMBS related obligations, at fair value $ 9,926,131 
Nonrecourse debt, at fair value 5,227,942 
Other financing lines of credit 3,340,345 
Payables and other liabilities 669,048 
Notes payable, net 353,924 
Total liabilities assumed 19,517,390 
Net identifiable assets acquired 1,143,524 
Goodwill (3)
$ 1,271,324 
(1) Represents the fair market value of earnout shares issued to Sellers, which will be settled with shares of Class A Common Stock and is accounted for as equity classified contingent consideration.
(2) Intangible assets were identified that met either the separability criterion or contractual legal criterion. The indefinite-lived trade names and definite-lived trade names intangible assets represent the values of all the Company’s trade names. The broker/customer relationships intangible asset represents the existing broker/customer relationships.
(3) Goodwill represents the excess of the gross consideration transferred over the fair value of the underlying net tangible and identifiable intangible assets acquired. Goodwill represents future economic benefits arising from acquiring FoA Equity, primarily due to its strong market position and its assembled workforce that are not individually identified and separately recognized as intangible assets. Approximately $85.2 million of the goodwill recognized was expected to be deductible for income tax purposes at the acquisition date.
There were certain payments and transactions expenses contingent on the Closing (i.e. the change-in-control event). The Company made one-time lump sum cash payments totaling $24.0 million to the holders of Phantom Units, and had $5.0 million of transaction expenses related to the Business Combination. Given these payments and expenses were triggered by the successful Closing of the Business Combination, the $29.0 million is considered to have been incurred "on the line", i.e., these payments and expenses are not presented in either the Predecessor or Successor periods.
Identifiable intangible assets  
Fair value
(in thousands)
Useful life
(in years)
Indefinite-lived trade names $ 178,000  N/A
Definite-lived trade names 8,800  10
Broker/customer relationships 530,900 
8-15
Total $ 717,700 
The following table sets forth the fair values of the assets acquired in connection with the RAI Transaction (in thousands):
Acquisition date fair value
Loans held for sale, at fair value
 $ 35,226 
Intangible assets - Technology
 1,890 
Goodwill
 5,627 
Other assets, net
 753 
Net assets acquired
 $ 43,496 
The following table sets forth the fair values of the assets acquired in connection with the Parkside Transaction (in thousands):
Acquisition date fair value
Intangible assets - Broker Relationships
 $ 10,200 
Goodwill
 22,400 
Other assets, net
 13 
Net assets acquired
 $ 32,613 
Business Acquisition, Pro Forma Information The following unaudited pro forma financial information presents the results of operations as if the Business Combination had occurred on January 1, 2020. The unaudited pro forma results may not necessarily reflect the actual results of operations that would have been achieved nor are they necessarily indicative of future results of operations.
For the year ended December 31,
2021 2020
Pro forma revenues $ 1,736,999  $ 1,777,444 
Pro forma net (loss) income $ (1,173,481) $ 295,136 
Pro forma net (loss) income attributable to controlling interest $ (344,687) $ 70,411 
Pro forma net (loss) income attributable to noncontrolling interest $ (828,795) $ 224,725