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Acquisitions and Dispositions | 6 Months Ended
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Mar. 31, 2026
Business Combination [Abstract] |
Acquisitions and Dispositions | ACQUISITIONS AND DISPOSITIONS Store acquisitions The transactions summarized herein were accounted for as business combinations and the operating results of all acquired entities are included within the consolidated operating results of the Company from the date of each respective acquisition. The Company’s acquisitions are accounted for such that the assets acquired and liabilities assumed are recognized at their acquisition date fair values, with any excess of the consideration transferred over the estimated fair values of the identifiable net assets acquired recorded as goodwill. The fair values are preliminary for up to one year from the date of acquisition as they may be subject to measurement period adjustments if new information is obtained about facts and circumstances that existed as of the acquisition date. Breeze Autocare On December 1, 2025, the Company acquired 100% of the equity interests in Breeze Autocare (“Breeze”) for total cash consideration of $637.4 million, subject to certain customary post-closing adjustments. Breeze is a provider of automotive quick lube and other preventive maintenance services operating predominantly under the Oil Changers SM brand with stores in California, Texas, and the Midwest. The acquisition initially included 204 service center stores and aligns with the Company’s strategy to expand the store network in key markets. The Company funded the Breeze acquisition with an amendment to its Senior Credit Agreement to add a seven-year $740.0 million term loan facility (the “Term Loan B”) commensurate with the closing of the transaction with excess proceeds used to pay down outstanding debt. Refer to Note 5 for further discussion regarding the Term Loan B. Fair values were determined by a third-party valuation firm that utilized management inputs, estimates, and assumptions through a combination of recognized valuation methodologies including the income, market and cost approaches. Property, plant, and equipment acquired was valued using a combination of cost and market approaches. Lease assets and liabilities and identifiable intangible assets were valued using an income approach, and the held for sale disposal group fair value was estimated using a market approach. Each of these approaches utilized unobservable Level 3 inputs, which included market prices observed in comparable transactions (market approach), replacement cost (cost approach), and estimates of future cash flows (income approach). Management ultimately oversees the third-party valuation firm to ensure that the transaction-specific assumptions are appropriate for the Company. The purchase consideration was allocated to the identifiable assets acquired and liabilities assumed based on their respective acquisition date fair values with the excess of the purchase consideration recognized as goodwill as shown below:
(In millions) |  | Breeze acquisition (a) |  |
Cash |  | $ | 4.6 |  |  |
Receivables |  | 15.4 |  |  |
Inventories |  | 4.0 |  |  |
Other current assets |  | 2.2 |  |  |
Property, plant and equipment (b) |  | 75.1 |  |  |
Operating lease assets |  | 72.9 |  |  |
Goodwill (c) |  | 524.2 |  |  |
Intangible assets (d) |  |  |  |
Customer relationships |  | 11.0 |  |  |
Trademarks and trade names |  | 8.0 |  |  |
Other noncurrent assets |  | 0.4 |  |  |
Net assets held for sale (e) |  | 90.0 |  |  |
Trade and other payables |  | (7.8) |  |  |
Accrued expenses and other liabilities |  | (14.5) |  |  |
Other current liabilities (b) |  | (14.8) |  |  |
Operating lease liabilities |  | (62.7) |  |  |
Other noncurrent liabilities (b) |  | (70.6) |  |  |
Total net assets acquired |  | $ | 637.4 |  |  |
(a)Includes measurement period adjustments recorded through March 31, 2026. (b)Includes finance lease assets in property, plant and equipment and finance lease liabilities in other current and noncurrent liabilities. Finance lease assets acquired were $45.1 million and finance lease liabilities of $3.9 million and $57.0 million in other current and noncurrent liabilities, respectively. (c)Goodwill is not deductible for income tax purposes and is assigned to the Company’s single reporting unit expected to benefit from the synergies of the acquisition. Goodwill is primarily attributed to the operational synergies and potential growth expected to result in economic benefits in the respective markets of the acquisition. (d)Intangible assets acquired December 1, 2025 have a weighted average amortization period of 10 years. (e)The disposal group met the criteria to be classified as held for sale and was measured as a unit of account at fair value less costs to sell as of the acquisition date. Net assets held for sale were disposed on December 1, 2025 in connection with the FTC-required divestiture and sale and are no longer held for sale as of March 31, 2026. During the three months ended March 31, 2026, the Company recorded measurement period adjustments of $29.1 million, primarily consisting of a reduction in net deferred tax liabilities of $27.9 million included within Other noncurrent liabilities on the Condensed Consolidated Balance Sheets, with a corresponding offset to decrease goodwill. The adjustments to net deferred tax liabilities primarily relate to the partial release of a valuation allowance on interest deduction carryforwards. The Company incurred $3.1 million and $15.6 million in third-party costs pertaining to the acquisition of Breeze, which are included in Selling, general and administration expenses in the Condensed Consolidated Statements of Comprehensive Income during the three and six months ended March 31, 2026, respectfully. Net revenues and Net income from the Breeze acquisition included in the Company's results since December 1, 2025, the date of the acquisition, are $66.3 million and $7.3 million, respectively. The following table presents the unaudited pro forma information summarizing the combined results of operations for Valvoline and Breeze, prepared as if the Breeze acquisition occurred on October 1, 2024:
|  | Three months ended March 31 | Six months ended March 31 |  |  |  |
(In millions) |  | 2026 |  | 2025 | 2026 |  | 2025 |  |  |  |
Net revenues |  | $ | 503.8 |  |  | $ | 450.8 |  | $ | 999.6 |  |  | $ | 912.7 |  |  |  |  |
Net income |  | 46.0 |  |  | 29.3 |  | 92.9 |  |  | 38.1 |  |  |  |  |
These pro forma amounts are calculated after applying the Company's accounting policies and adjusting the results to reflect the incremental amortization of acquired intangible assets and interest expense on acquisition-related debt. Material nonrecurring adjustments, such as the $15.6 million in transaction costs and the $57.9 million pre-tax loss on the sale of the divested locations have been included as if the Breeze acquisition had occurred on October 1, 2024. The pro forma net income amounts also incorporate adjustments to reflect the income tax effects of the pro forma adjustments described above. The unaudited pro forma information is presented for illustrative purposes only and is not necessarily indicative of the results of operations that would have actually occurred had the acquisition been completed on the date assumed, nor is it intended to project future results. The unaudited pro forma results exclude the impact of any cost synergies or integration benefits. Other acquisitions In addition to the Breeze acquisition, the Company acquired thirteen service center stores in single and multi-store transactions, including four former Express Care locations converted to company-operated service center stores and four former franchise locations, for an aggregate purchase price of $11.3 million during the six months ended March 31, 2026. These acquisitions expand Valvoline's retail presence in key North American markets and contributed to growing the number of company-operated service center stores to 1,210 as of March 31, 2026. Dispositions Breeze disposal Immediately following the Breeze acquisition, 45 of the acquired Breeze stores were sold in accordance with the Federal Trade Commission (“FTC”) Decision and Order that required the disposal of certain acquired locations for the Company to receive regulatory clearance to close the Breeze acquisition. The Company determined that these stores represented a disposal group and met the held-for-sale criteria as of the acquisition date; therefore, the Company measured the disposal group at fair value less costs to sell as a single unit of account, which was determined to be $90.0 million. The Company determined that this disposal transaction was not orderly and the sale proceeds did not represent fair value of the disposal group due to the regulatory compulsion imposed by the FTC to sell the 45 stores under a compressed timeline, including FTC approval of the buyer and purchase agreement, and insufficient market exposure for the Company to conduct customary marketing activities for the sale of such stores. Accordingly, the fair value was estimated using a market approach, specifically the guideline merged and acquired company method, based on valuation multiples observed in comparable quick lube retail transactions. The selected valuation multiple reflected market participant assumptions and was adjusted for differences in scale, absence of brand and intellectual property, and other operational characteristics of the divested stores relative to the comparable transactions. The non-recurring fair value measurement of the disposal group has been categorized as Level 3 due to the unobservable inputs utilized in the valuation. The table below shows the components of the pre-tax loss on sale included within Other loss (income), net in the Condensed Consolidated Statement of Comprehensive Income for the six months ended March 31, 2026.
| (in millions)
Sale proceeds received | $ | 32.1 |
Less: Carrying amount of disposal group (a) | 90.0 |
Pre-tax loss | $ | (57.9) |
(a)Carrying amount of disposal group at disposition represents fair value less costs to sell. Note that costs to sell were de minimis and waived as immaterial for further consideration. Other dispositions Valvoline completed the sale of 10 company-operated service center stores to a franchisee during the first fiscal quarter of 2026 and completed the sale of 39 company-operated service center stores to a new franchisee during the first fiscal quarter of 2025. Valvoline recognized pre-tax gains on sale of $14.8 million and $74.2 million within Other loss (income), net in the Condensed Consolidated Statements of Comprehensive Income related to these transactions during the six months ended March 31, 2026 and 2025, respectively.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent + Details
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