SMAR Daily Industry News

Baldwin Q3 Revenue Jumps 31% as CAC Deal Drives Growth

Baldwin Group posted a 31% increase in total revenue for the third quarter, reaching $480.3 million, as it approaches a planned exit from public markets. The surge is largely attributable to the January 2026 acquisition of CAC Group, which contributed $91.7 million in partnership commissions that are excluded from organic calculations.

When the CAC acquisition is stripped out, organic revenue grew only 6% in the quarter and 3% over the nine months ended September 30, marking the slowest nine-month pace since Baldwin listed on Nasdaq in 2019. For comparison, the company recorded 17% organic growth for full-year 2024 and 7% for full-year 2025.

CAC brought revenues of roughly $295 million into the deal and added capabilities across natural resources, private equity, real estate, construction, financial lines, cyber and surety. Its impact inflates Baldwin’s headline revenue figures for all three quarters of 2026, a boost that will fade after the acquisition passes the 12-month ownership threshold.

Adjusted EBITDA showed stronger performance, with the margin expanding 240 basis points to 22.2%, EBITDA rising 47% to $106.9 million, and adjusted free cash flow increasing 33% to $55.6 million. These improvements reflect operating leverage in Baldwin’s distribution business.

GAAP net loss widened to $81.6 million, more than double the $30.2 million loss recorded in Q3 2025. The loss reflects higher amortization, interest expense and contingent consideration charges tied to Baldwin’s acquisition pace, while $21 million in go-private transaction costs were added back in the adjusted EBITDA reconciliation.

The results arrived weeks after Baldwin announced a definitive agreement to be taken private in a transaction valued at approximately $7.7 billion. The buyer group, led by Sequence AI Holdings and DFO Management—the family office of Dell Technologies founder Michael Dell—will pay $32.50 per share in cash, with eligible employees retaining a minority stake alongside the lead investors.

Sequence AI, an AI-focused holding firm backed by 8VC, Conviction and Lux Capital, frames the acquisition around an AI-driven transformation of Baldwin’s distribution model. CEO Trevor Baldwin described the deal as providing “long-duration capital and frontier AI execution.” DFO Management’s structure offers patient capital without a fixed exit horizon.

For agencies, brokers and practices within Baldwin’s network, the change signals a forthcoming structural transformation under new ownership with a technology mandate. The recent rebrand of Founder Shield, Baldwin’s digital insurance platform for high-growth companies, completed in October 2026, further consolidates the company’s operating identity ahead of the private transition.

Baldwin’s $3 billion/30 Catalyst Program, aimed at accelerating automation, business-process optimization and artificial intelligence, recorded $2.9 million in transformation costs in Q3, which were added back in the adjusted EBITDA reconciliation. The program is expected to continue under the private company structure.

Why it matters

The shift to private ownership and AI-focused strategy could reshape distribution and technology services for insurers and brokers in Baldwin’s network.

FAQ

What drove the 31% revenue increase in Baldwin’s Q3 results?
The increase was largely driven by the CAC Group acquisition, which contributed $91.7 million in partnership commissions.

How did organic revenue growth compare to total revenue growth?
Organic revenue grew 6% in Q3 and 3% over the nine months, while total revenue rose 31%.

What are the terms of Baldwin’s go-private transaction?
The deal values Baldwin at about $7.7 billion, with shareholders receiving $32.50 per share in cash; eligible employees keep a minority stake.

What is the expected impact of the AI-focused ownership?
The new owners plan to use AI to transform Baldwin’s distribution model and accelerate automation through the Catalyst Program.

Source: Insurance Business America. See the original source for full details.