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Acquisition | 6 Months Ended
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Jul. 03, 2026
Business Combination [Abstract] |
Acquisition | Acquisitions The Company continually evaluates potential acquisitions that either strategically fit with its existing portfolio or expand its portfolio into a new and attractive business area. The Company makes appropriate adjustments to purchase price allocations prior to completion of the applicable measurement period, as required. Only facts and circumstances that existed as of the acquisition date are considered for subsequent adjustment. Refer to Note 5, “Acquisitions” in the Company’s 2025 Form 10-K for further information on the Company’s accounting treatment of acquisitions. On June 1, 2026, ESAB completed its previously announced acquisition of Eddyfi, a global leader in advanced inspection and monitoring technologies, incorporated under the laws of the Province of Québec (such transaction, the “Acquisition”). ESAB acquired all of the issued and outstanding shares of Eddyfi for consideration transferred of approximately $1.5 billion, net of cash received, which included customary purchase price adjustments set forth in the Purchase Agreement. The operations of Eddyfi are reflected across both of the Company’s reportable segments, Americas and EMEA & APAC, based on the geographic location of the respective operation. The Company financed the Acquisition with cash on hand, proceeds from the March 2026 offering of 5.625% senior notes due 2031 and proceeds from a drawdown on its revolving facility as described in Note 9, “Debt” and the proceeds from the private placements of Series A Mandatory Convertible Preferred Stock and Common Stock described in Note 12, “Equity.” For the three and six months ended July 3, 2026, the Acquisition added $21.4 million to Net sales and contributed an immaterial amount to Net income. Preliminary purchase price allocation Under the acquisition method of accounting, the Company makes an initial allocation of the purchase price at the date of acquisition based upon its understanding of the fair value of the acquired assets and assumed liabilities from information obtained during due diligence and through other sources. The following table summarizes the preliminary fair value of the assets acquired and liabilities assumed at the date of acquisition based on information that is currently available. The preliminary fair value of the assets acquired and liabilities assumed is determined based upon certain preliminary valuations and studies that have yet to be finalized. Accordingly, the assets acquired and liabilities assumed are subject to adjustment once the detailed analyses are completed, which adjustments could be material, management is continuing to finalize its valuation and will complete its purchase price allocation within one year of the date of acquisition. The following summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of Acquisition:
Cash and cash equivalents | $ | 24,673 |
Trade receivables | 60,002 |
Inventories | 49,851 |
Goodwill | 811,409 |
Intangible assets | 735,000 |
Deferred income taxes | (156,908) |
Other, net(1)(2) | (30,013) |
| $ | 1,494,014 |
(1) Includes current and non-current amounts. (2) Includes approximately $40 million of Lease assets - right of use and lease liability. Goodwill arises because purchase price exceeds fair value of acquired identifiable net assets due to anticipated future earnings and cash flow potential of the acquired businesses; prevailing market multiples applied to earnings and cash flows in comparable transactions; the competitive nature of the acquisition process; the strategic benefits of accelerating market entry or enhancing existing product offerings without incurring the time, cost and risk associated with internal development; and the complementary fit and expected synergies these businesses contribute to the Company’s existing operations. The Company preliminarily recorded $811.4 million of goodwill related to Eddyfi, none of which is expected to be deductible for income tax purposes. This has been allocated across the Company's reportable segments based on the geographic location of the entity, with $621.0 million allocated to the Americas segment and $190.4 million allocated to the EMEA & APAC segment. The following summarizes the preliminary estimated fair value of significant, identifiable intangible assets acquired, excluding goodwill, as of June 1, 2026:
| Intangible Asset |  | Amortization period
| (in thousands) |  | (years)
Customer relationships | $ | 563,000 |  |  | 15-20
Trade names | 66,000 |  |  | 5-20
Technology | 89,000 |  |  | 10
Backlog | 17,000 |  |  | 2
| $ | 735,000 |  |  |
Preliminary fair value adjustments were made to intangible assets and inventories upon acquisition. Deferred taxes were preliminarily adjusted to record the book-tax basis difference of acquisition accounting adjustments primarily related to amounts allocated to intangible assets, inventories and other liabilities. The fair value of the property, plant and equipment, cash and cash equivalents, trade receivables and other assets and liabilities were estimated to approximate their book values. Pro forma financial information The Acquisition was accounted for as a business combination using the acquisition method of accounting and accordingly the Consolidated and Condensed Financial Statements include the financial position and results of operations from the date of the Acquisition. The unaudited pro forma information for the periods set forth below gives effect to the Acquisition as if it had occurred as of January 1, 2025. The unaudited pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the Acquisition been consummated as of that time:
| Three Months Ended |  | Six Months Ended
| July 3, 2026 |  | July 4, 2025 |  | July 3, 2026 |  | July 4, 2025
| (in thousands)
Net sales | $ | 847,135 |  |  | $ | 766,493 |  |  | $ | 1,649,895 |  |  | $ | 1,498,759 |
Net income attributable to common stockholders | 17,537 |  |  | 42,423 |  |  | 52,088 |  |  | 92,326 |
The pro forma combined historical results for the three and six months ended July 3, 2026 and July 4, 2025 were adjusted for the following: a reduction of interest and other financing expenses as a result of the repayment of outstanding indebtedness of Eddyfi; an increase in interest and other financing expenses as a result of the debt incurred by ESAB for the purpose of financing the Acquisition; the inclusion of the MCPS dividend at a rate of 6.50% per annum; an increase in amortization expense due to the intangible assets and inventory fair value step-up recorded. The pro forma combined results of operations do not include any adjustments to eliminate the impact of acquisition-related costs incurred by ESAB or Eddyfi or any cost savings or other synergies that resulted or may result from the Acquisition. Acquisition-related transaction costs The Company incurred approximately $17 million and $23 million of acquisition-related transaction costs in the three and six months ended July 3, 2026, respectively. These costs were recorded in Selling, general and administrative expense in the Consolidated Condensed Statements of Operations. For a description of the Company’s acquisition activity for the year ended December 31, 2025, refer to the financial statements as of and for the year ended December 31, 2025 and Note 5, “Acquisitions” thereto in the Company’s 2025 Form 10-K.

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