v3.25.4
Acquisitions
 12 Months Ended
Jan. 03, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Acquisitions Acquisitions
2025

Babbini S.p.A. and G.P.S Engineering S.r.l
On July 9, 2025, the Company acquired all the outstanding equity securities of Babbini S.p.A and G.P.S. Engineering S.r.l (collectively, Babbini), two Italy-based companies specializing in industrial dewatering and engineered power transmission solutions, for $16,483,000, net of cash acquired. Babbini is part of the Company's Industrial Processing segment. Goodwill from the Babbini acquisition was $1,508,000 and separately identifiable intangible assets were $5,278,000, neither of which is expected to be deductible for tax purposes.

Clyde Industries Holdings, Inc.
On October 7, 2025, the Company acquired all the outstanding equity securities of Clyde Industries Holdings, Inc. and its subsidiaries (collectively, Clyde Industries) for $173,730,000, net of cash acquired. Clyde Industries is a manufacturer of highly engineered boiler efficiency and cleaning system technologies. Clyde Industries is part of the Company's Industrial Processing segment. Goodwill from the Clyde Industries acquisition was $55,789,000 and separately identifiable intangible assets acquired were $87,400,000, neither of which is expected to be deductible for tax purposes.

Purchase Price Allocation
The following table summarizes the aggregate purchase price and estimated fair values of the net assets acquired related to the 2025 acquisitions.
(In thousands)
Total
Cash and Cash Equivalents
$10,304 
Accounts Receivable
22,923 
Inventories
39,662 
Other Current Assets
4,579 
Property, Plant and Equipment
23,003 
Other Assets
4,929 
Definite-Lived Intangible Assets
Customer relationships
80,463 
Tradenames
7,390 
Product technology
4,825 
Goodwill
57,297 
Total assets acquired
255,375 
Accounts Payable
6,775 
Customer Deposits
9,831 
Other Current Liabilities
15,625 
Long-Term Obligations
91 
Deferred Income Taxes
17,037 
Other Long-Term Liabilities
5,499 
Total liabilities assumed
54,858 
Net assets acquired
$200,517 
Purchase Price:
 
Cash Paid
$200,517 
The final purchase accounting and purchase price allocations remain subject to change as the Company continues to refine its preliminary valuation of certain acquired assets and liabilities assumed, which may result in adjustments to the assets and liabilities, including goodwill. The Company expects the remaining purchase price adjustments will primarily relate to the valuation of acquired intangibles and deferred income taxes.
The weighted-average amortization period for the definite-lived intangible assets related to the 2025 acquisitions is 14 years, including weighted-average amortization periods of 14 years for customer relationships, 13 years for product technology, and 17 years for tradenames.
Revenue and operating income for the year ended January 3, 2026 associated with the 2025 acquisitions from their respective acquisition dates are as follows:
(In thousands)
Total
Revenue
$27,836 
Operating Income (a)
$1,700 
(a) Includes amortization expense associated with acquired profit in inventory of $1,469,000 in 2025.

Unaudited Supplemental Pro Forma Information
The following unaudited pro forma information presents the combined results of the Company, Babbini and Clyde Industries as if the acquisitions had occurred as of the beginning of 2024:
(In thousands, except per share amounts)January 3, 2026December 28, 2024
Revenue$1,129,921 $1,169,569 
Net Income Attributable to Kadant$113,637 $113,295 
Earnings per Share Attributable to Kadant
Basic$9.65 $9.65 
Diluted$9.64 $9.62 
The historical consolidated pro forma financial information above has been adjusted to give effect to pro forma events that are (i) directly attributable to the acquisitions, (ii) expected to have a continuing impact on the Company, and (iii) factually supportable. Pro forma results include adjustments to reflect, among other things, incremental intangible asset amortization to be incurred based on preliminary identifiable asset values and interest expense associated with debt incurred to finance the acquisitions, as well as related income tax effects. Pro forma results include the following non-recurring pro forma adjustments:
•Pre-tax charge to cost of revenue of $3,216,000 in 2024 and reversal of $1,470,000 in 2025 for the sale of inventory revalued at the date of acquisition.
•Pre-tax charge to SG&A expenses of $3,362,000 in 2024 and reversal of $3,362,000 in 2025 for acquisition costs.
•Estimated tax effects related to the pro forma adjustments.
These pro forma results of operations have been prepared for comparative purposes only, and they do not purport to be indicative of the results of operations that would have resulted had the acquisitions for Babbini and Clyde Industries been completed as of the beginning of 2024, or that may result in the future.

2024

Key Knife, Inc.
On January 1, 2024, the Company acquired Key Knife pursuant to a securities purchase agreement dated December 22, 2023, for $153,386,000, net of cash acquired. Key Knife is a global supplier of engineered knife systems for custom chipping, planing, and flaking solutions for wood products industries and is part of the Company's Industrial Processing segment. Goodwill from the Key Knife acquisition was $35,894,000, of which $29,158,000 is expected to be deductible for tax purposes over 15 years. In addition, separately identifiable intangible assets acquired were $91,620,000, of which $77,400,000 is expected to be deductible for tax purposes over 15 years.
As part of the acquisition, the Company acquired a 45% interest in two of Key Knife's subsidiaries, increasing its noncontrolling interest liability by $9,319,000 based on the income valuation approach. Under a put and purchase option as outlined in the securities purchase agreement, the seller can demand the Company purchase, or the Company can demand that the seller sell to the Company, the remaining interest in these subsidiaries at any time after December 31, 2027. The
purchase price would be based on a total enterprise value as defined in the original purchase agreement. See "Other Acquisitions" below for additional information.

KWS Manufacturing Company, Ltd.
On January 24, 2024, the Company acquired all of the outstanding equity securities of KWS Manufacturing Company, Ltd. (KWS) for $79,429,000. The Company paid $79,191,000 and assumed a $238,000 bank overdraft. KWS is a leading manufacturer of conveying equipment for the bulk material handling industry and is part of the Company's Material Handling segment. Goodwill from the KWS acquisition was $38,418,000 and separately identifiable intangibles assets were $29,100,000, both of which are expected to be fully deductible for tax purposes over 15 years.

Dynamic Sealing Technologies LLC
On May 31, 2024, the Company acquired all of the outstanding equity securities of Dynamic Sealing Technologies LLC and affiliates (collectively, DSTI) for $53,570,000, net of cash acquired. DSTI is a leading manufacturer of engineered fluid sealing and transfer solutions for rotating applications and is part of the Company's Flow Control segment. Goodwill from the DSTI acquisition was $14,946,000, of which $14,161,000 is expected to be deductible for tax purposes over 15 years. In addition, separately identifiable intangible assets acquired were $24,380,000, all of which are expected to be fully deductible for tax purposes over 15 years.

Other Acquisitions
On May 2, 2024, the Company acquired a service business in Germany, which is included in the Company's Material Handling segment, for $3,352,000, net of cash acquired and subject to a post-closing adjustment.
On May 6, 2024, the Company acquired the remaining outstanding shares of a Key Knife subsidiary in which the Company previously held a noncontrolling interest for $523,000 in cash.
On August 21, 2024, the Company acquired a technology company, which is included in its Material Handling segment. The total purchase price was approximately $11,785,000, which included cash paid of $8,843,000, net of cash acquired, an estimated post-closing adjustment of $1,157,000 to be paid within 18 months of closing, and contingent consideration with a fair value of $1,785,000, measured at the date of the acquisition. The contingent consideration is payable upon the achievement of certain revenue performance targets earned between June 30, 2025 and June 30, 2027. The maximum future value of the contingent consideration subject to payment is approximately $11,711,000, calculated using the foreign currency spot rate at January 3, 2026. The valuation of the contingent consideration is dependent on the following assumptions: the probability of successful achievement of certain revenue targets, forecasted revenue, revenue volatility, and discount rate. See Note 10, Fair Value Measurements and Fair Value of Financial Instruments, for additional information related to the fair value of the contingent consideration assumed in the acquisition.
In August 2024, the Company acquired certain other assets for a total of $1,755,000 in cash.

Purchase Price Allocation
The following table summarizes the aggregate purchase price and estimated fair values of the net assets and noncontrolling interests acquired related to the 2024 acquisitions. Measurement period adjustments in 2025 were not material to the Company's results of operations.
(In thousands)Total
Cash and Cash Equivalents$11,509 
Accounts Receivable12,382 
Inventories24,649 
Other Current Assets
4,936 
Property, Plant, and Equipment37,028 
Other Assets16,527 
Definite-Lived Intangible Assets
 
Customer relationships115,095 
Product technology24,530 
Tradenames9,497 
Other4,901 
Goodwill99,640 
Total assets acquired$360,694 
(In thousands)Total
Accounts Payable$3,301 
Customer Deposits
3,192 
Other Current Liabilities
10,212 
Deferred Income Taxes
5,786 
Other Long-Term Liabilities
13,849 
Total liabilities assumed36,340 
Noncontrolling interests acquired
9,319 
Net assets and noncontrolling interests acquired
$315,035 
Purchase Price:
Cash Paid$311,844 
Fair Value of Contingent Consideration (Note 10)
1,785 
Post-Closing Adjustments
1,406 
$315,035 
The weighted-average amortization period for the definite-lived intangible assets related to the 2024 acquisitions is 17 years, including weighted-average amortization periods of 18 years for customer relationships, 12 years for product technology, and 20 years for tradenames.
Revenue and operating income for the year ended December 28, 2024 associated with the 2024 acquisitions from their respective acquisition dates are as follows:

(In thousands)
 Total
Revenue$115,227 
Operating Income (a)
$5,548 
(a) Includes amortization expense associated with acquired profit in inventory and backlog of $8,441,000 in 2024.

2023
On December 19, 2023, the Company acquired a business in Sweden, which is included in the Company's Industrial Processing segment, for approximately $895,000, net of cash acquired.