v3.26.1
Acquisition
 9 Months Ended
Jul. 31, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Acquisition
2Acquisition
Tornado Infrastructure Equipment Ltd. ("Tornado Infrastructure Equipment")
On December 8, 2025 ("closing date"), pursuant to an Arrangement Agreement ("Purchase Agreement") dated October 6, 2025, the company completed its acquisition of Tornado Infrastructure Equipment, a publicly held Canadian company and a manufacturer in the hydrovac excavation solutions industry. Tornado Infrastructure Equipment manufactures hydrovac excavation solutions and industrial equipment solutions for the underground construction, power transmission and energy markets and provides innovative product offerings that broaden and strengthen the company's Professional segment and expand its dealer network.
The Tornado Infrastructure Equipment acquisition was structured as an equity purchase, pursuant to which the company acquired 100 percent of the equity interests of the legal entities that comprised Tornado Infrastructure Equipment, with the legal entities continuing as surviving entities and wholly-owned subsidiaries of the company. As part of the acquisition, the company also acquired the real property used by Tornado Infrastructure Equipment. The cash consideration, net of cash acquired, was $210.3 million ("purchase price"). The company funded the purchase price with borrowings under its existing revolving credit facility. As a result of the acquisition, the company incurred immaterial acquisition-related transaction costs during the three and nine month periods ended July 31, 2026. Acquisition-related transaction costs are recorded within selling, general and administrative expense within the Condensed Consolidated Statements of Earnings.
Preliminary Fair Value Measurements
The company accounted for the acquisition in accordance with the accounting standards codification guidance which requires identifiable assets acquired and liabilities assumed to be measured at their estimated fair values as of the closing date. As of July 31, 2026, the company has substantially completed its process for measuring the fair values of the assets acquired and liabilities assumed based on information available as of the closing date, with the primary exception of the valuation of income taxes. The company expects to finalize its valuation and complete the fair value measurements as soon as practicable but no later than one year from the closing date of the acquisition, as required.
The following table summarizes the preliminary initial and updated estimated fair values assigned to the assets acquired and liabilities assumed, and the adjustments made from the initial preliminary fair values. These preliminary fair values are based on internal company and independent external third-party valuations and are subject to change as certain asset and liability valuations are finalized. The following allocation reflects management's assessment as of July 31, 2026:
(Dollars in millions)Initial Preliminary AllocationMeasurement Period AdjustmentsUpdated Allocation
Cash and cash equivalents$21.3 $— $21.3 
Receivables5.4 — 5.4 
Inventories36.7 — 36.7 
Prepaid expenses and other current assets3.7 (0.1)3.6 
Property, plant, and equipment, net14.8 (2.8)12.0 
Right-of-use assets, net2.6 0.1 2.7 
Goodwill137.6 (10.3)127.3 
Other intangible assets:63.8 13.9 77.7 
Indefinite-lived trade name19.6 — 19.6 
Finite-lived developed technology9.8 0.9 10.7 
Finite-lived customer-related29.5 16.3 45.8 
Finite-lived backlog4.9 (3.3)1.6 
Deferred income tax assets0.1 — 0.1 
Accounts payable(13.8)0.4 (13.4)
Accrued liabilities(18.5)(1.6)(20.1)
Short-term lease liabilities(0.8)0.1 (0.7)
Long-term lease liabilities(2.4)0.3 (2.1)
Deferred income tax liabilities(18.9)— (18.9)
Total fair value of net assets acquired231.6 — 231.6 
Less: cash and cash equivalents acquired(21.3)— (21.3)
Total purchase price$210.3 $— $210.3 
The goodwill recognized is primarily attributable to the value of the workforce, the reputation of Tornado Infrastructure Equipment, expected future cash flows, and expected synergies, including customer and dealer growth opportunities, integrating and expanding existing product lines, and cost reduction initiatives. Key areas of expected cost reduction synergies include increased purchasing power for commodities, components, parts, and supply chain consolidation. The goodwill resulting from the acquisition of Tornado Infrastructure Equipment was recognized within the company's Professional segment and is the primary driver for the increase in the company's Professional segment goodwill to $566.5 million as of July 31, 2026 from $440.9 million as of October 31, 2025. Goodwill is non-deductible for tax purposes. Fair value measurements did not materially impact the company's Condensed Consolidated Statements of Earnings for the three and nine month periods ended July 31, 2026.
Other Intangible Assets Acquired
The preliminary fair value measurement of the net assets acquired resulted in the recognition of $77.7 million of other intangible assets as of the closing date. The fair values of the acquired developed technology, customer-related, and backlog intangible assets were determined using the income approach whereby an intangible asset's fair value is equal to the present value of future economic benefits to be derived from ownership of the asset. The useful lives of the other intangible assets were determined based on the period of expected cash flows used to measure the fair value of the intangible assets adjusted as appropriate for entity-specific factors including legal, regulatory, contractual, competitive, economic, and/or other factors that may limit the useful life of the respective intangible asset. As of the closing date, the acquired finite-lived intangible assets had a weighted average useful life of 11.7 years. The fair values of the customer-related and backlog intangible assets were determined using the excess earnings method and were based on the expected operating cash flows attributable to the respective intangible asset, which were determined by deducting expected economic costs, including operating expenses and contributory asset charges, from the revenue expected to be generated from the respective intangible asset. As of the closing date of the acquisition, the weighted-average useful life of the customer-related and backlog intangible assets were determined to be 13.7 years and 6 months, respectively. The fair values of the finite-lived developed technology and indefinite-lived trade names were determined using the relief from royalty method, which is based on the hypothetical royalty stream that would be received if the company were to license the respective developed technology or trade name and were based on expected future revenues from the respective developed technology or trade name. As of the closing date of the acquisition, the weighted-average useful life of the developed technology was determined to be 5.0 years.
Amortization expense for the finite-lived intangible assets resulting from the acquisition of Tornado Infrastructure Equipment for the three and nine month periods ended July 31, 2026 was $(1.1) million and $5.2 million, which reflects adjustments to the preliminary fair value measurement during the measurement period.
Results of Operations
Tornado Infrastructure Equipment's results of operations are included within the company's Professional reportable segment in the company's Condensed Consolidated Financial Statements from the closing date. For the three and nine month periods ended July 31, 2026, the company recognized $31.5 million and $80.2 million of net sales, respectively, from Tornado Infrastructure Equipment's operations. Tornado Infrastructure Equipment's operations increased Professional segment profit by $2.1 million and $4.4 million for the three and nine month periods ended July 31, 2026, respectively. Unaudited pro forma financial information is not disclosed as the Tornado Infrastructure Equipment acquisition was not considered material to the company's Consolidated Results of Operations.