Acquisitions

6 Months Ended

Feb. 28, 2025

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

QSC, LLC

On January 1, 2025, we acquired all of the equity interests of QSC, LLC (“QSC”), a leader in the design, engineering, and manufacturing of audio, video, and control solutions and services, for $1.2 billion in cash. This acquisition is intended to expand AIS into a cloud-manageable audio, video, and control platform that includes controls, sensors, and software with broad applications across multiple end-markets including education, commercial, hospitality, government, healthcare, and transportation. We funded the transaction using cash on hand and proceeds from our indebtedness. See Debt and Lines of Credit footnote of the Notes to Consolidated Financial Statements for further details on our outstanding borrowings.

We accounted for the acquisition of QSC in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”). Acquired assets and liabilities were recorded at their estimated acquisition-date fair values. Acquisition-related professional fees were expensed as incurred for $14.1 million and $18.7 million for the three and six months ended February 28, 2025, respectively. These costs were recorded in Selling, distribution, and administrative expenses on the Consolidated Statements of Comprehensive Income and were reflected in our unallocated corporate amounts.

The following table outlines the preliminary fair values of the assets and liabilities obtained in connection with the QSC acquisition as of January 1, 2025 (in millions):






	Purchase Price Allocation
Consideration transferred:
Cash consideration	$	1,203.0

Identifiable assets:
Intangible assets(1)	702.6




Inventories	94.7
Property, plant, and equipment	27.0
Operating lease right-of-use assets	23.2
Accounts receivable	55.7
Other assets	81.7
Total identifiable assets	984.9

Liabilities assumed:
Accounts payable	32.6
Operating lease liabilities	24.3
Other liabilities	88.5
Total liabilities assumed	145.4

Total identifiable net assets	839.5
Goodwill	$	363.5

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(1) Gross intangible assets of $702.6 million reflect estimates for definite-lived intangibles with a preliminary estimated weighted average useful life of approximately 15 years.

Assets and liabilities for QSC are reflected in the Consolidated Balance Sheets as of February 28, 2025. Approximately $275.0 million of the preliminary goodwill is expected to be deductible for tax purposes. The preliminary goodwill is recorded in the AIS segment, and it is primarily comprised of benefits related to expanding AIS’ technology and audio, video, and control solution product portfolios.

Amounts recorded for acquired assets and liabilities are deemed to be provisional until disclosed otherwise, as we continue to gather information related to the identification and valuation of acquired assets and liabilities, including but not limited to, intangible assets, potential liabilities, tax-related items, and final net working capital adjustments, if any. These amounts are expected to change as we finalize the allocation.

The operating results of QSC have been included in our consolidated financial statements since the date of acquisition. The following table provides the amount of QSC net sales and net income included within our consolidated financial statements since the acquisition date (in millions):


	February 28, 2025
	Three Months Ended		Six Months Ended
Revenue	$	95.1	$	95.1
Net income(1)	(1.7)		(1.7)

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(1) Net income includes preliminary pre-tax nonrecurring acquisition date fair value adjustments to inventory of $10.4 million and preliminary amortization of acquired intangible assets of $7.8 million for the three and six months ended February 28, 2025.

We have included unaudited pro forma financial information to show the impacts of the QSC acquisition to our consolidated results assuming the acquisition closed as of the first day of our prior fiscal year. The unaudited pro forma information is not necessarily indicative of our results of operations had the acquisition been completed on this date, neither is it necessarily indicative of our future results. Amounts in the table below combine our previously reported results with QSC’s results for the corresponding periods as well as adjustments for purchase accounting, accounting policy alignments, changes to our capital structure, including additional interest expense associated with borrowings to fund the acquisition, and other nonrecurring items that were incurred in connection with the acquisition, assuming they occurred as of September 1, 2023 (in millions):


	Quarter-to-Date				Year-to-Date
	February 28, 2025		February 29, 2024		February 28, 2025		February 29, 2024
Revenue	$	1,059.4	$	1,030.2	$	2,158.6	$	2,096.4
Net income(1)	98.2		79.9		208.8		148.5

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(1) Pro forma net income for the quarter-to-date period ended February 29, 2024 includes preliminary pre-tax nonrecurring acquisition date fair value adjustments to inventory of $6.8 million. Pro forma net income for the year-to-date period ending February 29, 2024 includes preliminary pre-tax nonrecurring acquisition date fair value adjustments to inventory of $22.5 million and acquisition-related costs of $18.7 million. We did not have any other significant nonrecurring pro forma adjustments directly attributable to the acquisition.

Arize Assets

On January 19, 2024, we acquired certain assets related to Arize® horticulture lighting products from Current Lighting Solutions, LLC. The assets have been included in ABL's financial results since the date of acquisition and did not have a material impact to our consolidated financial condition, results of operations, or cash flows.