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Acquisitions

9 Months Ended

Mar. 31, 2025

Note (4) – Acquisitions:

LPF Acquisition

On July 1, 2024, the Company completed the acquisition of Laundry Pro of Florida, Inc. (“LPF”), a Florida based distributor of commercial laundry products and a provider of related technical installation and maintenance services to the on-premise and vended laundry segments of the commercial laundry industry. The consideration paid by the Company in connection with the acquisition consisted of $5.9 million in cash. The Company funded the acquisition with borrowings under its credit facility. Fees and expenses related to the acquisition of LPF, consisting primarily of legal and other professional fees, were not material and are classified as selling, general and administrative expenses in the Company’s consolidated statement of operations for the nine months ended March 31, 2025.

The acquisition of LPF was treated for accounting purposes as a purchase of LPF using the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”), pursuant to which the consideration paid by the Company was allocated to the acquired assets and assumed liabilities, in each case, based on their respective fair values as of the closing date, with the excess of the consideration transferred over the fair value of the net assets acquired being allocated to goodwill. The computation of the purchase price consideration and the preliminary allocation of the consideration to the net assets acquired are presented in the following table (in thousands):

Allocation of purchase price consideration:
Inventories	$	1,672
Other assets		145
Equipment and improvements		380
Intangible assets		1,470
Accounts payable and accrued expenses		(16	)
Customer deposits		(156	)
Total identifiable net assets		3,495
Goodwill		2,390
Total	$	5,885

While, as of the date of this Quarterly Report on Form 10-Q, the Company has finalized its assessment of certain of the assets acquired and liabilities assumed, the Company is continuing its valuation of certain working capital items, including inventories, other assets and accounts payable and accrued expenses, which is subject to adjustment in accordance with the asset purchase agreement. Accordingly, the purchase price allocation set forth above reflects preliminary fair value estimates based on preliminary work and analyses performed by management and is subject to change as additional information to assist in determining the fair value of those assets as of the closing date is obtained during the post-closing measurement period of up to one year.

Intangible assets consist of $550,000 allocated to the Laundry Pro of Florida trade name and $920,000 allocated to customer-related intangible assets. The Laundry Pro of Florida trade name is indefinite-lived and therefore not subject to amortization. The Laundry Pro of Florida trade name will be evaluated for impairment annually, or more frequently if an event occurs or circumstances change that indicate that it may be impaired, by comparing its fair value to its carrying amount to determine if a write-down to fair value is required. Customer-related intangible assets are being amortized over 10 years.

Goodwill is attributable primarily to the assembled workforce acquired, as well as benefits from the increased scale of the Company as a result of the acquisition. The goodwill from the acquisition is deductible for income tax purposes.

ODL Acquisition

On November 1, 2024, the Company completed the acquisition of O’Dell Equipment & Supply, Inc. (“ODL”), an Indiana based distributor of commercial laundry products and a provider of related technical installation and maintenance services to the on-premise and vended laundry segments of the commercial laundry industry. The consideration paid by the Company in connection with the acquisition consisted of $4.6 million in cash. The Company funded the acquisition with borrowings under its credit facility. Fees and expenses related to the acquisition of ODL, consisting primarily of legal and other professional fees, were not material and are classified as selling, general and administrative expenses in the Company’s consolidated statement of operations for the nine months ended March 31, 2025.

The acquisition of ODL was treated for accounting purposes as a purchase of ODL using the acquisition method of accounting in accordance with ASC 805, pursuant to which the consideration paid by the Company was allocated to the acquired assets and assumed liabilities, in each case, based on their respective fair values as of the closing date, with the excess of the consideration transferred over the fair value of the net assets acquired being allocated to goodwill. The computation of the purchase price consideration and the preliminary allocation of the consideration to the net assets acquired are presented in the following table (in thousands):

Allocation of purchase price consideration:
Accounts receivable	$	409
Inventories		1,043
Equipment and improvements		183
Intangible assets		1,750
Accounts payable and accrued expenses		(355	)
Customer deposits		(307	)
Total identifiable net assets		2,723
Goodwill		1,877
Total	$	4,600

Intangible assets consist of $530,000 allocated to the O’Dell Equipment & Supply trade name and $1,220,000 allocated to customer-related intangible assets. The O’Dell Equipment & Supply trade name is indefinite-lived and therefore not subject to amortization. The O’Dell Equipment & Supply trade name will be evaluated for impairment annually, or more frequently if an event occurs or circumstances change that indicate that it may be impaired, by comparing its fair value to its carrying amount to determine if a write-down to fair value is required. Customer-related intangible assets are being amortized over 10 years.

HMI Acquisition

On February 1, 2025, the Company completed the acquisition of Haiges Machinery, Inc. (“HMI”), an Illinois based distributor of commercial laundry products and a provider of related technical installation and maintenance services to the on-premise and vended laundry segments of the commercial laundry industry. The consideration paid by the Company in connection with the acquisition consisted of $2.0 million in cash. The Company funded the acquisition with borrowings under its credit facility. Fees and expenses related to the acquisition of HMI, consisting primarily of legal and other professional fees, were not material and are classified as selling, general and administrative expenses in the Company’s consolidated statement of operations for the three and nine months ended March 31, 2025.

The acquisition of HMI was treated for accounting purposes as a purchase of HMI using the acquisition method of accounting in accordance with ASC 805, pursuant to which the consideration paid by the Company was allocated to the acquired assets and assumed liabilities, in each case, based on their respective fair values as of the closing date, with the excess of the consideration transferred over the fair value of the net assets acquired being allocated to goodwill. The computation of the purchase price consideration and the preliminary allocation of the consideration to the net assets acquired are presented in the following table (in thousands):

Allocation of purchase price consideration:
Accounts receivable	$	219
Inventories		689
Equipment and improvements		307
Intangible assets		230
Other assets		44
Accounts payable and accrued expenses		(66	)
Customer deposits		(121	)
Total identifiable net assets		1,302
Goodwill		677
Total	$	1,979

Intangible assets consist of $90,000 allocated to the Haiges Machinery trade name and $140,000 allocated to customer-related intangible assets. The Haiges Machinery trade name is indefinite-lived and therefore not subject to amortization. The Haiges Machinery trade name will be evaluated for impairment annually, or more frequently if an event occurs or circumstances change that indicate that it may be impaired, by comparing its fair value to its carrying amount to determine if a write-down to fair value is required. Customer-related intangible assets are being amortized over 10 years.

Supplemental Pro Forma Results of Operations

The following supplemental pro forma information presents the results of operations of the Company, after giving effect to the acquisitions of HMI and LPF. As permitted by ASC 805-10-50-2, the following supplemental pro forma information does not give effect to the acquisition of ODL because it was impracticable to provide such information for the interim periods presented due to the lack of availability of meaningful financial statements of ODL that comply with GAAP.

The following supplemental pro forma information was prepared as if the acquisitions of HMI and LPF were consummated on the first day of each of the interim periods presented below. The supplemental pro forma information set forth below reflects adjustments based on currently available information and assumptions made by management. While management believes the assumptions made are reasonable under the circumstances, they may not prove to be accurate. The pro forma information set forth below is presented for informational purposes only and is not necessarily indicative of what the actual results of operations of the Company would have been if the acquisitions of HMI and LPF had occurred on the dates assumed, nor is it indicative of future results of operations.

	Nine months ended March 31,				Three months ended March 31,
(in thousands)	2025		2024		2025		2024
Revenues	$	285,184	$	275,515	$	94,128	$	87,492
Net income		5,269		4,429		1,026		1,084

The Company’s consolidated results of operations for the nine and three months ended March 31, 2025 include total revenue of approximately $9.0 million and $4.2 million, respectively, and total net income of approximately $319,000 and $34,000, respectively, attributable to all the acquired companies, based on the consolidated effective tax rate. These results of the acquired businesses do not include the effects of acquisition costs or interest expense associated with the consideration paid in connection with the acquisitions.

GNA Acquisition

On April 1, 2025, the Company completed the acquisition of Girbau North America, Inc. (“GNA”), a Wisconsin based master distributor of commercial laundry products and a provider of related technical installation and maintenance services to the on-premise and vended laundry segments of the commercial laundry industry. The consideration paid by the Company in connection with the acquisition consisted of approximately $40.0 million in cash. The Company funded the acquisition with borrowings under its credit facility. Fees and expenses related to the acquisition of GNA, consisting primarily of legal and other professional fees, were approximately $300,000 and are classified as selling, general and administrative expenses in the Company’s consolidated statement of operations for the three and nine months ended March 31, 2025. The financial position, including assets and liabilities, and results of operations of GNA following the April 1, 2025 closing date of the acquisition will be included in the Company’s consolidated financial statements commencing in the quarter ending June 30, 2025.