ESAB (ESAB) - 2025 Q4 - Annual Results

Acquisition Details - The acquisition involves 9559-2796 QUÉBEC INC. purchasing all issued and outstanding shares of EDDYFI HOLDING INC., NDT NATION INC., NDT ALLIANCE INC., HMT INC., GESTION MICHAEL SIROIS INC., and GESTION FLORIAN HARDY INC.[2] - The agreement is dated January 31, 2026, indicating a future strategic move for market expansion and consolidation within the industry[2] - The purchase price and estimated purchase price details are outlined in the agreement, emphasizing the financial commitment involved in this acquisition[4] - The agreement includes provisions for post-closing adjustments, which may impact the final financial outcomes of the acquisition[4] - The transaction involves multiple stakeholders, including various limited partnerships and trusts, indicating a complex ownership structure[9] - The agreement specifies conditions precedent that must be satisfied for the closing to occur, ensuring due diligence and regulatory compliance[5] - The Parent company, ESAB CORPORATION, is involved for the purpose of providing a guaranty, highlighting the financial backing for the acquisition[12] - The agreement outlines the treatment of options and their surrender prior to closing, which may affect employee compensation and retention strategies[13] - The transaction is part of a broader strategy to enhance the company's portfolio and capabilities in the market[2] - The agreement includes confidentiality and exclusivity clauses, ensuring that sensitive information is protected during the transaction process[5] Financial Statements and Definitions - The audited consolidated financial statements for Previan Technologies for the fiscal year ended December 31, 2024, are referred to as the "Annual Financial Statements"[24] - The term "Cash" includes all cash and cash equivalents, totaling an aggregate sum calculated in accordance with the Accounting Principles[32] - "Current Assets" are defined as the aggregate sum of accounts receivable, current tax credits, work-in-progress, and inventories, calculated in accordance with the Accounting Principles[50] - "Current Liabilities" encompass accounts payable, accrued expenses, and customer deposits, calculated in accordance with the Accounting Principles[51] - The "Debt Financing" refers to any credit facility or issuance of debt securities obtained for financing the Transactions[57] - "Corporation Transaction Expenses" include all fees and costs incurred in connection with the Transactions, excluding certain liabilities[49] - "Antitrust Clearances" are necessary for the Transactions, including HSR Clearance and Competition Act Clearance if required[26] - The "Effective Time" is defined as 0:01 a.m. Eastern time on the Closing Date[65] - The "Closing Cash" is calculated immediately prior to the Effective Time, in accordance with the Accounting Principles[38] - "Books and Records" include all financial data and records related to the Business, excluding privileged communications[29] - The Escrow Amount is set at $14,500,000[72] - The Group's Indebtedness includes all outstanding principal amounts and accrued interest on borrowed money, with specific exclusions for accounts payable and deferred tax liabilities[109] - The Financial Statements encompass both Annual and Interim Financial Statements, adhering to IFRS standards[108] - The Group's obligations under Government Contracts are material to the Business, indicating significant reliance on governmental agreements[95] Employee and Shareholder Information - Employee Plans include a wide range of benefits such as retirement, health insurance, and profit-sharing arrangements for current and former employees[66] - The Group's Employee Shareholders exclude Gestion Holdcos, indicating a specific shareholder structure that may impact governance[67] - The Group's employment contracts for key employees provide for annual salaries exceeding $150,000[131] Regulatory and Compliance Matters - The Group is subject to Environmental Laws regarding the handling of Hazardous Substances, which may impact operational compliance[67] - The Group's financing arrangements include various credit agreements with HSBC entities, indicating a structured approach to capital management[80][84] - The Group's future outlook may be influenced by Foreign Investment Clearances required for certain transactions, affecting market expansion strategies[86] - The Group's transactions require clearance from the Italian government under foreign investment laws[118] - The Group's agreements include provisions for regulatory approvals necessary for the completion of transactions[158] - "Regulatory Approvals" are necessary for closing transactions without restrictions[166] Financial Metrics and Obligations - The Target Working Capital is set at $76,000,000[184] - The definition of "Working Capital" includes the sum of Current Assets minus Current Liabilities[200] - "Taxes" encompass a wide range of levies including income, sales, and property taxes, among others[184] - "Registered Intellectual Property" includes patents, trademarks, copyrights, and domain name registrations[165] - "Transaction Personal Information" refers to personal data held by the Group related to employees and clients[191] - "Vendors' Transaction Expenses" include all fees and costs incurred by vendors prior to closing[197] - "Sanctioned Person" refers to individuals or entities identified on various sanctions lists[174] - "Shareholders Agreements" include multiple agreements among various stakeholders in the Corporation[176] - "R&W Insurance Policy" is referenced in the context of risk management related to transactions[170] Material Contracts and Financial Condition - Material contracts include distributor agreements with annual sales exceeding $2,000,000 over a nine-month period[123] - The Group's financial condition is subject to material adverse changes that could impact operations and transactions[122] - The Group has obligations related to various financial agreements with significant creditors, including NBC and HSBC[146] - The Group's capital expenditures or fixed asset acquisitions require payments exceeding $1,000,000[131] - The Group's interim period is defined as starting from the date of the agreement until the closing date or termination[115] - The Group's unaudited balance sheet as of September 30, 2025, reflects a consolidated financial position[115]