How was the acquisition of Bumble-LA by Bumble Roofing funded?
Bumble_Roofing Franchise · 2025 FDDAnswer from 2025 FDD Document
| Cash | $ 33,145 |
|---|---|
| Royalties and accounts receivable, net | 1,401,921 |
| Inventory | 1,220,640 |
| Prepaid expenses and other | 966,809 |
| Property and equipment, net | 631,169 |
| Intangibles | 93,505,648 |
| Accounts payable and accrued expenses | (152,960) |
| Contract liability - deferred revenue on franchise sales | (1,394,476) |
| Due to affiliates | (3,008,785) $ 93,203,111 |
Bumble-LA
On May 1, 2023, the Company acquired the assets Bumble-LA for the purpose of adding a roofing contractor brand to the existing portfolio. After net working capital adjustments, the purchase price of Bumble-LA was approximately $3,800,000 which includes an earnout provision of approximately $2,268,000, an estimate based on a percentage of the new formed franchisor's, Bumble, future franchise and royalties revenues. The acquisition was funded by capital contributions from Empower consisting of units of ownership interest in Bobcat Holdings valued at approximately $200,000 and cash. During 2024, additional consideration of $1,396,250 was paid to the former owner, which was comprised of $975,000 of ownership interest in Bobcat Holdings and $441,250 in cash. This payment was made within the mea
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 53)
What This Means (2025 FDD)
According to Bumble Roofing's 2025 Franchise Disclosure Document, the acquisition of Bumble-LA on May 1, 2023, was funded through a combination of capital contributions. The purchase price for Bumble-LA was approximately $3,800,000, which included an earnout provision of approximately $2,268,000. This earnout was estimated based on a percentage of Bumble Roofing's future franchise and royalties revenues.
The initial funding for the acquisition came from Empower, consisting of units of ownership interest in Bobcat Holdings valued at approximately $200,000, along with cash. This means that part of the acquisition was financed by giving the previous owners equity in Bobcat Holdings, indicating a shared interest in the future success of the franchise.
During 2024, Bumble Roofing made an additional payment of $1,396,250 to the former owner of Bumble-LA. This payment included $975,000 of ownership interest in Bobcat Holdings and $441,250 in cash. Because this payment occurred within the measurement period of the acquisition, it led to the recognition of additional goodwill on Bumble Roofing's financial statements. This goodwill represents the intangible value associated with the acquisition, such as brand reputation and customer relationships.