v3.25.2
Acquisitions
 3 Months Ended
May 31, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Acquisitions Acquisitions
On November 4, 2024, we completed the acquisition of UW Solutions for $240.9 million in cash. UW Solutions is a U.S. based, vertically integrated manufacturer of high-performance coated substrates with a portfolio of well-known brands, including ResinDEK®, ChromaLuxe®, RDC Coatings™, and Unisub®, each known as a leader in its specified applications. The UW Solutions business activity is included in our Large-Scale Optical Segment.

The total purchase consideration was $232.2 million in cash, net of a favorable net working capital adjustment of $0.9 million and cash acquired of $8.7 million. The acquisition was funded with cash on hand and borrowings under our existing credit agreement. During fiscal 2025, we incurred total pre-tax acquisition-related expenses of $10.3 million associated with the acquisition. During the first quarter of fiscal 2026, we incurred $0.1 million and $0.2 million in integration costs associated with the acquisition, which are included in cost of sales and SG&A within our consolidated results of operations, respectively.

We accounted for the acquisition as a purchase of a business and recorded the excess of the purchase price over the estimated fair value of the assets acquired and liabilities assumed as goodwill of $107.8 million. The goodwill recognized is attributable primarily to expected synergies by integrating UW Solutions into our Performance Surfaces Segment and by creating a scalable growth platform in the specialty coatings and materials market. The goodwill is expected to be amortized and deductible for income tax purposes. We have provisionally determined the appropriate fair values of the acquired intangible assets and completed our analysis of the economic lives of the assets acquired.

The following table presents the estimated fair values of assets acquired and liabilities assumed at the acquisition date:
(In thousands)
Assets:
Cash and cash equivalents$8,703 
Receivables, net12,427 
Inventories, net17,903 
Other current assets1,122 
Property, plant and equipment26,563 
Operating lease right-of-use assets14,189 
Goodwill107,826 
Intangible assets, net79,679 
Other non-current assets166 
Total Assets$268,578 
Liabilities:
Accounts payable5,126 
Accrued compensation and benefits6,900 
Operating lease liabilities1,259 
Other non-current liabilities1,490 
Noncurrent operating lease liabilities12,930 
Total Liabilities$27,705 
Net assets recorded$240,873 

The impact of the acquisition of UW Solutions on our consolidated results of operations for the three-month period ended on May 31, 2025 was $22.0 million of net sales and $1.4 million net loss, respectively.

The following supplemental unaudited pro forma information presents our financial results as if the acquisition of UW Solutions had occurred on March 3, 2024. This supplemental pro forma information has been prepared for comparative purposes and would not necessarily indicate what may have occurred if the acquisition had been completed on March 3, 2024, and this information is not intended to be indicative of future results.

(in thousands, except earnings per share data)
(Unaudited)
Three Months Ended
June 1, 2024
Net sales$354,628 
Net earnings29,930 
Earnings per share:
Basic$1.37 
Diluted$1.36 

Nonrecurring charges of $0.3 million integration costs incurred in the first quarter of fiscal 2026 are reflected as if those charges were incurred in the first quarter of fiscal 2025 supplemental pro forma earnings.

These amounts have been calculated after applying our accounting policies and adjusting the results of UW Solutions to reflect the effect of definite-lived intangible assets recognized as part of the business combination on amortization expense as if the acquisition had occurred on March 3, 2024.