ACQUISITION |
9 Months Ended |
|---|---|
Jun. 30, 2025 | |
| ACQUISITION | |
| ACQUISITION | 3. ACQUISITION On April 25, 2025, the Company completed the acquisition of the Signature Management & Power (SM&P) business of Ultra Maritime for a purchase price of approximately $472 million, net of cash acquired. SM&P will become part of ESCO’s Aerospace & Defense (A&D) segment and will be known as ESCO Maritime Solutions (Maritime) going forward. Their Signature Management and Power Management product lines are highly complementary to ESCO’s current naval programs. Signature Management offers solutions for surface ships and submarines that provide magnetic and electric field countermeasures to prevent underwater mine and sensor detection. Power Management provides innovative and highly-engineered motors that drive critical ship propulsion systems with an ultra-quiet design ensuring low vibration levels to increase stealth capabilities. For the quarter ended June 30, 2025, Maritime had $37.1 million of revenue since the acquisition date. Maritime’s revenues for the period from October 1, 2024 through April 25, 2025 (acquisition date) were approximately $103 million with EBIT margins in the mid-twenty percent range, which is comparable to the prior year period. Since the date of acquisition, the operating results for the Maritime business have been included as part of the A&D segment. The preliminary acquisition date fair value of the assets acquired and liabilities assumed were as follows: $72.2 million of cash, $22.9 million of accounts receivable, $17.0 million of inventory, $15.1 million of contract assets, $1.5 million of prepaid assets, $12.2 million of property, plant and equipment, $5.0 million of other assets, $9.7 million of accounts payable, $14.2 million of accrued expenses and other current liabilities, $104.5 million of contract liabilities, $3.5 million of other liabilities, $46.3 million of deferred tax liabilities, $290.5 million of customer relationships and $61.3 million of backlog. The customer relationships were preliminarily determined to have a useful life of fifteen years and the backlog was determined to have a useful life of two years. Management is still in the process of reviewing the purchase price allocation. The acquired goodwill of $222.7 million relates to the excess value associated with opportunities to expand the services and products that the Company can offer to its customers and access to new markets. The Company does not expect all of the goodwill will be deductible for tax purposes. |