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Business Acquisition
 12 Months Ended
Sep. 30, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Business Acquisition Business Acquisition
On August 15, 2025, Powell UK Limited, a fully owned subsidiary of Powell Industries, Inc. completed the previously announced business acquisition of all outstanding equity interests in Remsdaq, a U.K.-based manufacturer of SCADA RTUs for electrical substation control and automation in generation, transmission and distribution, for a total consideration of $18.4 million including cash acquired of $4.6 million. Cash payment of $15.2 million, including cash acquired of $4.6 million, was made on the acquisition date and deferred payments of $3.2 million are contingent upon Remsdaq meeting certain technical and financial milestones. We recorded assets acquired and liabilities assumed in connection with this acquisition based on their estimated fair values as of the acquisition date of August 15, 2025. In September 2025, Remsdaq achieved its financial milestone and accordingly, we made cash payments of $0.9 million and reduced the fair value of the deferred payments to $2.3 million. We incurred total acquisition-related costs of approximately $1.4 million, including legal, accounting, valuation, and other professional fees. These costs were expensed as incurred and included within Selling, General and Administrative Expenses in the Consolidated Statements of Operations.
The aggregate purchase price allocation at the acquisition date was as follows (in thousands):
Purchase Price Allocation
Fair value of assets acquired
Cash and cash equivalents$4,565 
Receivables1,095 
Inventory2,176 
Intangible assets5,773 
Goodwill5,143 
All other assets3,644 
Total assets recognized22,396 
Fair value of liabilities assumed
Liabilities assumed(2,542)
Deferred tax liabilities associated with intangible assets recognized related to acquisition(1,443)
Fair value of net assets$18,411 
Purchase Consideration
Cash consideration$15,175 
Fair value of contingent consideration3,236 
Total purchase consideration$18,411 
The fair value of the assets acquired and liabilities assumed are preliminary and subject to change until we finalize the valuation of net assets acquired.
Goodwill is non-deductible for income tax purposes and calculated as the excess of the consideration transferred over the net assets recognized and represents the anticipated synergies of acquiring Remsdaq. Other intangible assets of approximately $5.8 million include customer relationships, technology, trademarks and order backlog, as follows (in thousands) at the acquisition date:
Intangible Assets IdentifiedFair ValueUseful Life
Customer relationships$2,211 12
Technology3,030 5
Trademarks477 10
Order backlog55 1
Total$5,773 
We engaged an independent third-party valuation specialist to assist with the fair value measurement of the intangible assets assumed through the acquisition of Remsdaq, and the calculation of goodwill. The intangible assets were valued using the income approach, specifically the multi-period excess earnings method and the relief from royalty method. The inputs include forecasted future revenues, future margins, and revenues attributable to existing customers, obsolescence factor, royalty rate, customer attrition rate, contributory asset charges and discount rates, which are unobservable inputs that are based on our own and Remsdaq’s assumptions. Accordingly, the fair values of goodwill and other intangible assets are considered level 3 measurements under the U.S. GAAP fair value hierarchy.
The purchase price includes up to $3.2 million in contingent consideration, of which approximately $0.9 million has been earned and paid in September 2025 after Remsdaq achieved its financial target. The remaining contingent consideration was calculated based on a probability outcome model to measure the fair value of the contingent consideration, which is considered a Level 3 measurement under the U.S. GAAP fair value measurement hierarchy. As of September 30, 2025, we determined the fair value of the contingent consideration was $2.3 million.