3. Acquisitions

ASN Acquisition

On August 1, 2025, the Company acquired ASN Laundry Group (“ASN”), a New York-based distributor of commercial laundry products and a provider of related technical installation and maintenance services. The consideration paid by the Company in connection with the acquisition consisted of $0.5 million in cash. In addition, the Company assumed $0.1 million of accrued liabilities of ASN in connection with the transaction. Fees and expenses related to the acquisition, consisting primarily of legal and other professional fees, were not material and are classified as selling, general and administrative expenses in the Company’s consolidated statement of operations for fiscal 2026. 

The acquisition was treated for accounting purposes as a purchase of ASN using the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”), pursuant to which the consideration paid by the Company was allocated to the acquired assets and assumed liabilities, in each case, based on their respective fair values as of the closing date, with the excess of the consideration transferred over the fair value of the net assets acquired being allocated to goodwill. The Company allocated $0.6 million to goodwill, which is expected to be amortized and deductible for tax purposes over 15 years.

Goodwill is attributable primarily to the assembled workforce, as well as the expected benefits from the increased scale of the Company as a result of the acquisition. The financial position, including assets and liabilities, of ASN is included in the Company’s consolidated balance sheet as of June 30, 2026 and the results of operations of ASN since the August 1, 2025 closing date are included in the Company’s consolidated financial statements for fiscal 2026.

BEL Acquisition

On February 28, 2026, the Company acquired substantially all of the assets of Belenky, Inc. (“BEL”), an Ohio-based distributor of commercial laundry products and a provider of related technical installation and maintenance services to the on-premise and vended laundry segments of the commercial laundry industry. The consideration paid by the Company in connection with the acquisition consisted of $2.5 million in cash, including a $0.1 million payment made during the three months ended June 30, 2026, and $0.7 million in amounts payable to the seller. The Company funded the acquisition with borrowings under its credit facility. Fees and expenses related to the acquisition of BEL, consisting primarily of legal and other professional fees, were not material.   

The acquisition of BEL was treated for accounting purposes as a purchase of BEL using the acquisition method of accounting in accordance with ASC 805, pursuant to which the consideration paid by the Company was allocated to the acquired assets and assumed liabilities, in each case, based on their respective fair values as of the closing date, with the excess of the consideration transferred over the fair value of the net assets acquired being allocated to goodwill. The computation of the purchase price consideration and the allocation of the consideration to the net assets acquired are presented in the following table (in thousands):

As of the date of this Annual Report on Form 10-K, the Company is continuing its valuation of intangible assets and certain working capital adjustments, which is subject to adjustment in accordance with the asset purchase agreement. Accordingly, the purchase price allocation set forth above reflects preliminary fair value estimates based on preliminary work and analyses performed by management and is subject to change as additional information to assist in determining the fair value of those assets as of the closing date is obtained during the post-closing measurement period of up to one year.

Intangible assets consist of $280,000 allocated to the Belenky trade name and $850,000 allocated to customer-related intangible assets. The Belenky trade name is indefinite-lived and therefore not subject to amortization. The Belenky trade name will be evaluated for impairment annually, or more frequently if an event occurs or circumstances change that indicate that it may be impaired, by comparing its fair value to its carrying amount to determine if a write-down to fair value is required. Customer-related intangible assets will be amortized over 10 years.

Goodwill is attributable primarily to the assembled workforce acquired, as well as benefits from the increased scale of the Company as a result of the acquisition. The goodwill from the acquisition is deductible for income tax purposes. The financial position, including assets and liabilities, of BEL is included in the Company’s consolidated balance sheet as of June 30, 2026 and the results of operations of BEL since the February 28, 2026 closing date are included in the Company’s consolidated financial statements for fiscal 2026.

LPF Acquisition

On July 1, 2024, the Company completed the asset acquisition of Laundry Pro of Florida, Inc. (“LPF”), a Florida based distributor of commercial laundry products and a provider of related technical installation and maintenance services to the on-premise and vended laundry segments of the commercial laundry industry. The consideration paid by the Company in connection with the acquisition consisted of $5.9 million in cash. The Company funded the acquisition with borrowings under its credit facility. Fees and expenses related to the acquisition of LPF, consisting primarily of legal and other professional fees, were not material and are classified as selling, general and administrative expenses in the Company’s consolidated statement of operations for fiscal 2025. 

The acquisition of LPF was treated for accounting purposes as a purchase of LPF using the acquisition method of accounting in accordance with ASC 805, pursuant to which the consideration paid by the Company was allocated to the acquired assets and assumed liabilities, in each case, based on their respective fair values as of the closing date, with the excess of the consideration transferred over the fair value of the net assets acquired being allocated to goodwill. The computation of the purchase price consideration and the allocation of the consideration to the net assets acquired are presented in the following table (in thousands):

Intangible assets consist of $550,000 allocated to the Laundry Pro of Florida trade name and $920,000 allocated to customer-related intangible assets. The Laundry Pro of Florida trade name is indefinite-lived and therefore not subject to amortization. The Laundry Pro of Florida trade name will be evaluated for impairment annually, or more frequently if an event occurs or circumstances change that indicate that it may be impaired, by comparing its fair value to its carrying amount to determine if a write-down to fair value is required. Customer-related intangible assets are being amortized over 10 years.

Goodwill is attributable primarily to the assembled workforce acquired, as well as benefits from the increased scale of the Company as a result of the acquisition. The goodwill from the acquisition is deductible for income tax purposes. The financial position, including assets and liabilities, of LPF is included in the Company’s consolidated balance sheet as of June 30, 2025 and 2026, and the results of operations of LPF since the July 1, 2024 closing date are included in the Company’s consolidated financial statements for fiscal 2025 and 2026.

ODL Acquisition

On November 1, 2024, the Company completed the asset acquisition of O’Dell Equipment & Supply, Inc. (“ODL”), an Indiana based distributor of commercial laundry products and a provider of related technical installation and maintenance services to the on-premise and vended laundry segments of the commercial laundry industry. The consideration paid by the Company in connection with the acquisition consisted of $4.5 million in cash, net of working capital adjustments. The Company funded the acquisition with borrowings under its credit facility. Fees and expenses related to the acquisition of ODL, consisting primarily of legal and other professional fees, were not material and are classified as selling, general and administrative expenses in the Company’s consolidated statement of operations for fiscal 2025.

The acquisition of ODL was treated for accounting purposes as a purchase of ODL using the acquisition method of accounting in accordance with ASC 805, pursuant to which the consideration paid by the Company was allocated to the acquired assets and assumed liabilities, in each case, based on their respective fair values as of the closing date, with the excess of the consideration transferred over the fair value of the net assets acquired being allocated to goodwill. The computation of the purchase price consideration and the allocation of the consideration to the net assets acquired are presented in the following table (in thousands):

Intangible assets consist of $530,000 allocated to the O’Dell Equipment & Supply trade name and $1,220,000 allocated to customer-related intangible assets. The O’Dell Equipment & Supply trade name is indefinite-lived and therefore not subject to amortization. The O’Dell Equipment & Supply trade name will be evaluated for impairment annually, or more frequently if an event occurs or circumstances change that indicate that it may be impaired, by comparing its fair value to its carrying amount to determine if a write-down to fair value is required. Customer-related intangible assets are being amortized over 10 years.

Goodwill is attributable primarily to the assembled workforce acquired, as well as benefits from the increased scale of the Company as a result of the acquisition. The goodwill from the acquisition is deductible for income tax purposes. The financial position, including assets and liabilities, of ODL is included in the Company’s consolidated balance sheet as of June 30, 2025 and 2026, and the results of operations of ODL since the November 1, 2024 closing date are included in the Company’s consolidated financial statements for fiscal 2025 and  2026.

HMI Acquisition

On February 1, 2025, the Company completed the asset acquisition of Haiges Machinery, Inc. (“HMI”), an Illinois based distributor of commercial laundry products and a provider of related technical installation and maintenance services to the on-premise and vended laundry segments of the commercial laundry industry. The consideration paid by the Company in connection with the acquisition consisted of $2.1 million in cash, net of cash acquired. The Company funded the acquisition with borrowings under its credit facility. Fees and expenses related to the acquisition of HMI, consisting primarily of legal and other professional fees, were not material and are classified as selling, general and administrative expenses in the Company’s consolidated statement of operations for fiscal 2025. 

The acquisition of HMI was treated for accounting purposes as a purchase of HMI using the acquisition method of accounting in accordance with ASC 805, pursuant to which the consideration paid by the Company was allocated to the acquired assets and assumed liabilities, in each case, based on their respective fair values as of the closing date, with the excess of the consideration transferred over the fair value of the net assets acquired being allocated to goodwill. The computation of the purchase price consideration and the allocation of the consideration to the net assets acquired are presented in the following table (in thousands):

Intangible assets consist of $90,000 allocated to the Haiges Machinery trade name and $140,000 allocated to customer-related intangible assets. The Haiges Machinery trade name is indefinite-lived and therefore not subject to amortization. The Haiges Machinery trade name will be evaluated for impairment annually, or more frequently if an event occurs or circumstances change that indicate that it may be impaired, by comparing its fair value to its carrying amount to determine if a write-down to fair value is required. Customer-related intangible assets are being amortized over 10 years.

Goodwill is attributable primarily to the assembled workforce acquired, as well as benefits from the increased scale of the Company as a result of the acquisition. The goodwill from the acquisition is deductible for income tax purposes. The financial position, including assets and liabilities, of HMI is included in the Company’s consolidated balance sheet as of June 30, 2025 and 2026, and the results of operations of HMI since the February 1, 2025 closing date are included in the Company’s consolidated financial statements for fiscal 2025 and 2026.

GNA Acquisition

On April 1, 2025, the Company completed the acquisition of Girbau North America, Inc. (“GNA”), a Wisconsin based master distributor of commercial laundry products and a provider of related technical installation and maintenance services to the on-premise and vended laundry segments of the commercial laundry industry. The consideration in connection with the acquisition of $38.4 million consisted of approximately $42.2 million in cash (net of cash acquired), including a $4.2 million payment made during the three months ended December 31, 2025 which prior to December 31, 2025 was recorded as an amount payable to the seller, net of approximately $3.8 million for the effective settlement of acquirer receivables. The Company funded the acquisition with borrowings under its credit facility. Fees and expenses related to the acquisition of GNA, consisting primarily of legal and other professional fees, were approximately $300,000 and are classified as selling, general and administrative expenses in the Company’s consolidated statement of operations for fiscal 2025.

Intangible assets consist of $7.7 million allocated to customer-related intangible assets being amortized over 10 years.

Goodwill is attributable primarily to the assembled workforce acquired, as well as benefits from the increased scale of the Company as a result of the acquisition. The financial position, including assets and liabilities, of GNA is included in the Company’s consolidated balance sheet as of June 30, 2025 and 2026, and the results of operations of GNA since the April 1, 2025 closing date are included in the Company’s consolidated financial statements for fiscal 2025 and 2026.

Supplemental Pro Forma Results of Operations

The following unaudited supplemental pro forma information presents the results of operations of the Company, after giving effect to the above-described acquisitions completed by the Company during fiscal 2026 and fiscal 2025. As permitted by ASC 805-10-50-2, the following unaudited supplemental pro forma information does not give effect to the acquisition of ODL because it was impracticable to provide such information for the periods presented due to the lack of availability of meaningful financial statements of ODL that comply with GAAP.

The following unaudited supplemental pro forma information was prepared as if the acquisitions were consummated on July 1, 2024. The unaudited supplemental pro forma information set forth below reflects adjustments based on currently available information and assumptions made by management. While management believes the assumptions made are reasonable under the circumstances, they may not prove to be accurate. The unaudited pro forma information set forth below is presented for informational purposes only and is not necessarily indicative of what the actual results of operations of the Company would have been if the acquisitions had occurred on the date assumed, nor is it indicative of future results of operations.

The Company’s consolidated results of operations for fiscal 2026 and 2025 include total revenue of approximately $86.5 million and $18.4 million, respectively, and total net income of approximately $2.4 million and $0.6 million, respectively, attributable to businesses acquired during fiscal 2026 and 2025, based on the consolidated effective tax rate. These results of acquired businesses do not include the effects of acquisition costs or interest expense associated with consideration paid for the acquisitions.