Note 2 – Acquisitions

Kloeckner Acquisition

In January 2026, the Company entered into a BCA with Kloeckner and launched a voluntary public cash takeover offer for all outstanding Kloeckner shares at €11.00 per share. As of May 31, 2026, the Company owned Kloeckner shares, but did not have a controlling interest or the ability to exercise significant influence. Accordingly, the Company has not recognized Kloeckner’s assets or liabilities in the accompanying consolidated and combined financial statements. On June 3, 2026, subsequent to the end of fiscal 2026, the transaction closed, and the Company acquired a controlling equity stake in Kloeckner. For additional information, see “Note 4 – Investments” and “Note 21 – Subsequent Events”.

Kloeckner acquisition-related expenses, consisting primarily of advisory, legal, accounting, valuation, regulatory and other professional fees, as well as certain integration expenses, were $35.8 million, fiscal 2026. These costs are included in SG&A in the consolidated and combined statements of earnings. For additional information on debt financing and related costs, see “Note 9 – Debt” and “Note 21 – Subsequent Events”.

Fiscal 2026

Sitem Group

On June 3, 2025, Tempel completed its acquisition of 52% of the Sitem Group. The Sitem Group produces electric motor laminations and accessory products primarily for automotive and industrial applications in Europe.

The total purchase price as of the acquisition date for the Sitem Group acquisition consisted of the following:

The cash consideration included cash that is contingent on certain customary conditions, of which €4.2 million (approximately $4.7 million) relates to the purchase of existing Sitem shares and €0.6 million (approximately $0.7 million) relates to the purchase of newly issued Sitem shares. During the fourth quarter of 2026, the net financial position adjustment calculation was finalized for an amount that differed from the preliminary valuation, which resulted in a change in the resulting valuation of residual goodwill. As of May 31, 2026, €1.2 million (approximately $1.4 million) of remaining contingent cash consideration had not yet been paid. The acquisition was funded primarily with restricted cash held in escrow at May 31, 2025. The difference between the contributed fair value of Tempel Nagold at the time of the acquisition and the noncontrolling interest in Tempel Nagold, which was at the Company’s historical cost, was $0.7 million and was recorded as an adjustment to APIC.

Total acquisition-related expenses, consisting primarily of legal, advisory, and valuation services were $5.4 million, of which $0.8 million and $4.6 million were incurred in fiscal 2026 and fiscal 2025, respectively. These costs are included in SG&A expense in the consolidated and combined statements of earnings. There was a one-time bonus of €4.0 million (approximately $4.6 million) that was paid to key individuals at the Sitem Group as a result of the successful closing, which was recorded in SG&A expense in the consolidated and combined statements of earnings during fiscal 2026. There was a deferred tax asset adjustment of €0.7 million (approximately $0.8 million) related to the disallowance of deferred tax assets located within Germany as a result of the contribution of Tempel Nagold. This adjustment was recorded in income tax expense in the consolidated and combined statements of earnings.

The Sitem Group transaction includes a series of put options and call options. The net put/call was valued at €9.4 million (approximately $10.7 million) using a Monte Carlo simulation in a risk-neutral framework and is recorded within Mezzanine Equity. The fair value of the remaining noncontrolling interest of 48% after the acquisition was determined using the implied enterprise value based on the purchase price. For additional information, see “Note 11 – Equity and Mezzanine Equity”.

The following table summarizes the consideration transferred and the fair values assigned to the assets acquired and liabilities assumed at the acquisition date. The fair values reflect valuation analyses performed with the assistance of a third-party valuation specialist and incorporate information available through the date of these consolidated and combined financial statements. During fiscal 2026, the Company finalized the valuation of the assets acquired and liabilities assumed and recognized certain net financial position adjustment and tax-related measurement period adjustments resulting from changes in the underlying calculations. These adjustments, including the related impact on residual goodwill, are reflected in the table below.

In addition to the Redeemable NCI above of $81.8 million, the Company recorded $17.4 million of redeemable noncontrolling interest related to the cash capital contribution and the contribution of Tempel Nagold, in the preliminary valuation, which was adjusted by $1.9 million as a result of final purchase accounting adjustments.

The Company recognized goodwill related to this acquisition of $17.5 million, which is not deductible for income tax purposes. The goodwill recognized in this acquisition was attributable to the acquired assembled workforce, expected synergies, expanded market opportunities, and economies of scale, none of which qualify for recognition as a separate intangible asset. Goodwill and intangible assets associated with foreign subsidiaries are translated at the applicable reporting period end exchange rates, with translation adjustments recorded in AOCI.

Acquired intangible assets are being amortized over the estimated useful lives on a straight-line basis. The following table summarizes the purchase price allocation and weighted average remaining useful lives for identifiable intangible assets acquired as of the acquisition date:

Operating results of the Sitem Group have been included in the Company’s consolidated and combined statements of earnings since June 3, 2025, the date of acquisition. For fiscal 2026, Sitem Group, including Tempel Nagold which was contributed in the acquisition, contributed net sales of $186.8 million and net loss attributable to controlling interest of $41.2 million.

The following unaudited pro forma information presents consolidated financial information as if the Sitem Group had been acquired on June 1, 2024, the beginning of fiscal 2025. Depreciation and amortization expense included in the pro forma results reflect the preliminary acquisition-date fair values assigned to the definite-lived intangible assets and fixed assets of the Sitem Group. Adjustments have been made to remove acquisition-related costs and the acquisition date fair value adjustment to acquired inventories. The pro forma adjustments noted below have been adjusted for the applicable income tax impact. The Company consolidates Sitem Group on a one-month reporting lag. Accordingly, the supplemental pro forma information for fiscal 2026 reflects eleven months of Sitem Group operating results, while the comparative fiscal 2025 pro forma information reflects a full year of operations as if the acquisition had occurred at the beginning of that fiscal year. The pro forma information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place on June 1, 2024.

Fiscal 2024

Voestalpine Automotive Components Nagold GmbH & Co. KG (“Voestalpine Nagold”)

On November 16, 2023, the Company acquired Voestalpine Nagold, including its lamination stamping facility in Nagold, Germany and related assets, for net cash consideration of $21.0 million and the assumption of a $0.9 million pension liability. Voestalpine Nagold produces automotive and electrical steel lamination stampings in Europe. The total purchase consideration was preliminarily allocated primarily to tangible assets, consisting of $12.3 million of property, plant and equipment and $9.0 million of net working capital, with $0.6 million recognized as goodwill.

The information included in the preliminary allocation of the purchase price was derived using estimates of the fair value and useful lives of the assets acquired. As a result of final purchase accounting adjustments, the total purchase consideration was updated. The purchase consideration consisted of $12.6 million of property, plant and equipment and $8.2 million of net working capital, with $1.1 million recognized as goodwill. Thus, the final purchase accounting adjustments consisted of $0.3 million of property, plant and equipment and $(0.8) million of net working capital, with $0.5 million to goodwill. There was no change in the valuation of the pension liability.

The purchase price included the fair values of other assets that were not identifiable, not separately recognizable under accounting rules (e.g., assembled workforce) or of immaterial value. The purchase price also included strategic benefits specific to the Company, which resulted in a purchase price in excess of the fair value of the identifiable net assets. The goodwill resulting from the acquisition will be deductible for income tax purposes.

The results of operations of Voestalpine Nagold have been included in the consolidated and combined statements of earnings since the date of acquisition. Pro forma results, including the acquired business since the beginning of fiscal 2024, would not be materially different from the reported results.