Company: PAX
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001628280-25-025640
Chunk: 276

Company: Patria Investments Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 19
Chunk 276
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 acquisition of 100% of a private equity carve-out interest from Aberdeen Plc (“ GPMS”) for cash and other consideration of $135.4 million on April 26, 2024. The Company accounted for this acquisition as a business combination and the purchase price paid for the assets acquired and liabilities assumed was allocated based on relative fair values, which resulted in the recognition of $30.5 million of goodwill at December 31, 2024.

The acquisition included deferred consideration payable to the selling shareholders, which was recorded at fair value at the acquisition date and totaled $37.5 million at December 31, 2024 and the Company recorded $24.0 million of contingent consideration payable to the selling shareholders of GPMS, which is based on the future growth of GPMS revenue and is accounted for at fair value through profit or loss.

The business combination required management to make significant judgments and assumptions related to the Company’s application of IFRS 3 - Business Combinations, including measuring and recording the fair values of the consideration payable, the businesses and the assets acquired and liabilities assumed. This also required management to make significant estimates using valuation models and techniques and significant assumptions about discount rates and forecasts of future revenues and operating margins, as well as projections of estimated future AUM of the acquired businesses. Changes in these assumptions could have a significant impact on purchase price allocations, including the amount of the goodwill identified.

We identified the business combinations as a critical audit matter because of the significant judgments and assumptions made by management to estimate the fair value of the acquired business, including the allocation of the purchase price, and the significant management judgments and complexity involved in determining the appropriate accounting treatment. Auditing this business combination required a high degree of auditor judgment and an increased extent of effort, including the need to involve our valuation specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the business combination included the following, among others:

• We tested the effectiveness of the control over the transaction, specifically the control over management’s assessment of the accounting treatment for the business combinations and the recognition and measurement of assets and liabilities, which included management’s selection of the methodologies and assumptions related to the discount rates and forecasted information used in determining estimated fair values

• We read and assessed the relevant contractual documents, including purchase and sale agreements and related shareholders agreements, as well as other documents including board of directors minutes, to understand and evaluate the business purpose and the critical terms, rights and obligations associated with the transactions.

• We read and