ACQUISITIONS AND INVESTMENTS |
6 Months Ended |
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Mar. 31, 2026 | |
| ACQUISITIONS AND INVESTMENTS [Abstract] | |
| ACQUISITIONS AND INVESTMENTS |
2.
ACQUISITIONS AND INVESTMENTS
Fiscal 2026 Acquisitions
Manufacturing
On October 14, 2025, Janel Corporation and Rubicon completed the transfer (the “Contribution”) of all of the issued and outstanding membership interests in Janel Group LLC (“Janel Group”), a New York limited liability company and a wholly owned subsidiary of Janel Corporation, held by Janel Corporation in exchange for 7,000,000 newly issued shares of Rubicon’s common stock, par value $0.001 per share (“Rubicon Common Stock”), pursuant to a contribution agreement dated as of August 20, 2025 between the Company and Rubicon. The Company determined the transaction represents a business combination under ASC 805, Business Combinations in which the Company is the accounting acquirer. The purchase price accounting related to this acquisition is preliminary and subject to subsequent adjustment. Prior to the acquisition, the Company held a 46.6% equity interest in Rubicon. Immediately following the acquisition, the Company obtained a controlling financial interest in Rubicon through its ownership of 86.5% of Rubicon’s outstanding equity.
Rubicon is a U.S.-based distributor of monocrystalline sapphire for applications in optical and industrial systems. Rubicon sells its products on a global basis to customers in North America, Europe and Asia and leases its operating and storage facilities in the Chicago metropolitan area on a month-to-month basis.
The fair value of the total consideration transferred was $9,082, which consisted of the acquisition-date fair value of the 13.5% equity interest of Janel Group transferred in exchange for the newly issued shares of Rubicon Common Stock at $3,105, $4,631 of acquisition-date fair value of the previously held equity interest in Rubicon, and the acquisition-date fair value of $1,346 of the noncontrolling interest held by other investors in exchange for $10,128 of deferred tax assets and the assumption of $197 of net liabilities. The fair value of the identifiable net assets exceeded the consideration transferred including the fair value of the previously held equity interest and fair value of the noncontrolling interest as it was an opportunistic acquisition. The resulting excess of $849 due to the limited market for the underlying assets was recognized as a gain on consolidation of acquisition on the acquisition date, which primarily reflects the excess value of the deferred tax assets. The gain on acquisition was recognized in gain on consolidation of acquisition in the unaudited condensed consolidated statements of operations.
The estimate of the fair value of assets and liabilities, which consisted primarily of deferred tax assets, required the use of significant assumptions and estimates. Critical estimates included, but were not limited to, future expected cash flows, including projected revenues and expenses, and the applicable discount rates. These estimates were based on assumptions that management believes to be reasonable; however, actual results may differ materially from these estimates.
Prior to the business combination, the Company held a noncontrolling equity interest in Rubicon, which was recorded under the fair value option method to equity method investment, and the changes in the fair value of the investment were included in Other (expense) income, net in the condensed consolidated statements of operations. At the acquisition date, the acquisition did not result in a gain or loss associated with the remeasurement because its previously held equity interest was measured at fair value prior to the acquisition.
Subsequent to the closing of the contribution, on November 17, 2025, the Company commenced a tender offer to purchase shares of Rubicon Common Stock at $4.75 per share in cash. On November 17, 2025, the tender offer was completed, and the Company purchased 426,000 shares of Rubicon common stock for an aggregate cash consideration of $2,024, and the shares of Rubicon common stock were transferred to Janel Corporation on November 17, 2025. After the tender offer, the Company owns approximately 91.0% of Rubicon’s outstanding common stock. The carrying amount of the noncontrolling interest has been adjusted, and the difference between the cash consideration paid and the change in the noncontrolling interest of $510 was recorded in the Company’s paid-in capital during the six months ended March 31, 2026, and no gain or loss was recorded.
Fiscal 2025 Acquisitions
Logistics
On August 1, 2025, the Company acquired a customer
list and other intangible assets of, and hired the employees of, a customs
broker and freight forwarder, which is included in the Logistics segment.
On September 2, 2025, the Company completed a business
combination whereby it acquired a majority ownership position in Interlog
USA, Inc. (“Interlog”) for an aggregate purchase price of $9,410 and recorded
a liability of $1,580 relating to the non-controlling interest. At closing, the
Company purchased 80% of the outstanding stock of Interlog for $6,825 in cash
with an additional $1,005 to be paid within 90 days subject to the achievement
of certain integration goals, which was paid in full as of December 31, 2025.
The Company also agreed to purchase the remaining 20% of Interlog stock two
years from the closing date for an amount equal to two times Interlog’s average
annual gross profit for the year ended December 31, 2027. The acquisition was
funded through the Company’s previous asset-backed facility with Santander
Bank, N.A (“Santander”). In connection with the combination, the Company
recorded an aggregate of $4,264 in goodwill and $5,844 in other identifiable
intangibles during the quarter ended September 30, 2025. Interlog is a
non-asset-based freight forwarder and domestic truck broker. The acquisition of
Interlog was completed to expand the Company’s service offerings in the Logistics
segment.
Life Sciences
On June 4, 2025, the Company acquired a majority ownership position in Biosensis Pty Ltd ("Biosensis") for
an aggregate purchase price of $5,136, net of $199 cash received and net of non-interest-bearing
liabilities assumed of $166. Additionally, the Company assumed debt of $563 and
recorded a liability of $1,486 relating to the non-controlling interest during
the quarter ended June 30, 2025. At closing, the Company purchased 80% of the
outstanding common stock of Biosensis for $2,754 in cash and $298 in the form
of a conversion of a note receivable. The majority ownership transaction
included put-call options exercisable on June 4, 2028 for the remaining 20% of
outstanding common stock. The acquisition was funded by the Company’s previous
acquisition draw facility with First Merchants Bank (“First Merchants”), and
the results of operations of Biosensis are included in Janel’s consolidated
results of operations since the date of the acquisition. In connection with the
acquisition, the Company recorded an aggregate of $2,607 in goodwill and $1,700
in other identifiable intangible assets during the quarter ended June 30, 2025.
Biosensis is a developer and manufacturer of antibodies and cell culture media
for research and diagnostic uses. Biosensis was founded in 2006 and is
headquartered in Thebarton, Australia. The acquisition of Biosensis was
completed to expand the Company’s product offerings in the Life Sciences
segment. On March 10, 2026, prior to the exercisability date of the put-call
options, Antibodies, Inc., entered into an agreement to purchase the remaining
20% of the outstanding common stock of Biosensis for $574. The difference
between the carrying value of the non-controlling interest and the cash
consideration was recognized in stockholders’ equity within paid-in capital on
the Company’s condensed consolidated balance sheets as of March 31, 2026. No
gain or loss was recognized in the Company’s condensed consolidated statements
of operations as of March 31, 2026. This agreement terminated the previously
established put-call option arrangement.
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