The Company made various acquisitions during the nine months ended October 27, 2024 (the “Fiscal 2024 Acquisitions”) and the nine months ended October 29, 2023 (the "Fiscal 2023 Acquisitions") with an aggregate transaction value of $748 million and $161 million, subject to working capital adjustments, respectively. These transactions were funded with cash and borrowings under the Senior Term Loan Credit Facility (as defined in Note 6).

•On September 16, 2024, the Company acquired certain assets and assumed certain liabilities of Green Equipment Company (“Green Equipment”). Green Equipment has one location and is a provider of underground utility protection equipment.

•On September 9, 2024, the Company acquired certain assets and assumed certain liabilities of GroGreen Solutions Georgia, LLC (“GroGreen”). GroGreen has four locations and is a provider of erosion control products.

•On August 12, 2024, the Company acquired certain assets and assumed certain liabilities of HM Pipe Products LP and HM Pipe Products Kitchner LP (collectively, “HM Pipe Products”). HM Pipe Products has two locations and is a Canadian distributor of water and wastewater products.

•On May 6, 2024, the Company acquired certain assets and assumed certain liabilities of Geothermal Supply Company Inc. (“GSC”). GSC has one location and is a distributor and fabricator of fusible HDPE pipe and other related products, primarily serving the geothermal, water and sewer industries.

•On April 30, 2024, the Company acquired certain assets and assumed certain liabilities of EGW Utilities Inc. (“EGW”). EGW has one location and is a provider of underground utility infrastructure products and services.

•On April 1, 2024, the Company acquired all of the outstanding shares of NW Geosynthetics Inc. (“ACF West”). ACF West has six locations and is a distributor of geosynthetic materials and provider of soil stabilization solutions.

•On March 7, 2024, the Company acquired all of the membership interests of DKC Group Holdings, LLC, and associated entities (collectively, “Dana Kepner”). Dana Kepner has twenty-one locations and is a distributor of water, wastewater, storm drainage, and geotextile products, along with specialty tools and accessories.

•On February 12, 2024, the Company acquired certain assets and assumed certain liabilities of Eastern Supply Inc. and a related entity (collectively, “Eastern Supply”). Eastern Supply has two locations and is a distributor of a broad range of storm drainage products, with custom fabrication capabilities.

•On July 12, 2023, the Company acquired all of the outstanding shares of J.W. D’Angelo Company, Inc. (“D’Angelo”). D’Angelo has three locations and is a full-service provider of fire protection and waterworks products.

•On July 10, 2023, the Company acquired certain assets and assumed certain liabilities of Foster Supply Inc. and R.P. Foster Inc. (collectively, “Foster Supply”). Foster Supply has seven locations and is a full-service provider of precast concrete structures, pipe, drainage materials and related geosynthetics products.

•On April 17, 2023, the Company acquired certain assets and assumed certain liabilities of Midwest Pipe Supply Inc. (“Midwest Pipe”). Midwest Pipe has one location and is a distributor of drainage and waterworks products.

•On April 10, 2023, the Company acquired certain assets and assumed certain liabilities of UPSCO Manufacturing & Distribution Company, UPSCO, Inc. and TMB Holdings, LLC (collectively, “UPSCO”). UPSCO is a provider of utility infrastructure products and services.

•On March 6, 2023, the Company acquired certain assets and assumed certain liabilities of Landscape & Construction Supplies LLC (“Landscape & Construction Supplies”). Landscape & Construction Supplies has two locations and is a provider of geosynthetics products.

The following table represents the preliminary allocation of the transaction price to the fair value of identifiable assets acquired and liabilities assumed in the Fiscal 2024 Acquisitions and final allocation of the transaction price to the fair value of identifiable assets acquired and liabilities assumed in the Fiscal 2023 Acquisitions. The allocations are preliminary for items including review of working capital balances and the completion of intangible asset valuations.


	Fiscal 2024 Acquisitions(1)		Fiscal 2023 Acquisitions
Cash	$	31	$	5
Receivables	93		28
Inventories	113		38
Intangible assets	277		76
Goodwill	322		17
Property, plant and equipment	16		24
Operating lease right-of-use assets	22		7
Other assets, current and non-current	2		4
Total assets acquired	876		199
Accounts payable	42		9
Deferred income taxes	39		8

Operating lease liabilities, current and non-current	22		7
Deferred consideration	13		10
Other liabilities, current and non-current	7		6
Net assets acquired	$	753	$	159

(1) Amounts include the preliminary purchase price allocation of Dana Kepner net assets of $259 million to goodwill, $184 million to intangible assets, $91 million to net working capital, $29 million to cash and $8 million to fixed assets. Additionally, includes a deferred income tax liability of $34 million for the Dana Kepner acquisition.


	Fiscal 2024 Acquisitions		Fiscal 2023 Acquisitions
Net assets acquired	$	753	$	159
Less: Working capital adjustment	—		(3)
Less: Cash acquired in acquisition	(31)		(5)



Total consideration, net of cash; investing cash outflow	$	722	$	151

In the above transactions, to the extent applicable, the excess of purchase price over net tangible and intangible assets acquired resulted in goodwill, which represents the assembled workforce and anticipated long-term growth in new markets, customers and products. Goodwill of $238 million and $3 million associated with the Fiscal 2024 Acquisitions and Fiscal 2023 Acquisitions, respectively, are fully deductible by the Company for U.S. income tax purposes.

For the Fiscal 2024 Acquisitions and Fiscal 2023 Acquisitions, the intangible assets acquired consist of customer relationships and trademarks.

The customer relationship intangible assets represent the value associated with those customer relationships in place at the date of each transaction included in the Fiscal 2024 Acquisitions and Fiscal 2023 Acquisitions. The Company valued the customer relationships using an excess earnings method including various inputs such as customer attrition rate, revenue growth rate, gross margin percentage and discount rate. Cash flows associated with the existing relationships are expected to diminish over time due to customer turnover. The Company reflected this expected diminishing cash flow through the utilization of an annual customer attrition rate assumption and in its method of amortization.

The other intangible assets primarily consist of trademark intangible assets that represent the value associated with the brand names in place at the date of the applicable closing.

A summary of the intangible asset acquired and assumptions utilized in the valuation for the Fiscal 2024 Acquisitions and Fiscal 2023 Acquisitions is as follows:


	Intangible Asset Amount		Weighted Average Amortization Period	Weighted Average Discount Rate		Weighted Average Attrition Rate
Customer Relationships
Fiscal 2024 Acquisitions (1)	$	272	10 years	13.5	%	12.4	%
Fiscal 2023 Acquisitions	76		10 years	16.2	%	12.6	%

Other Intangible Assets
Fiscal 2024 Acquisitions	$	5	5 years	13.6	%	N/A

(1) Customer relationships acquired and assumptions utilized in the valuation for the Dana Kepner acquisition were as follows: $181 million customer relationship intangible asset, 10 years amortization period, 13.0% discount rate and 12.5% attrition rate.

The following pro forma information presents a summary of the results of operations for the periods indicated as if the Dana Kepner acquisition had been completed as of January 30, 2023. The pro forma financial information is based on the historical financial information for the Company and Dana Kepner, along with certain pro forma adjustments. These pro forma adjustments consist primarily of:

•increased amortization and depreciation expense related to the intangible assets and fixed assets acquired, respectively, in the Dana Kepner acquisition;

•increased interest expense to reflect the borrowings under the Senior Term Loan Credit Facility including the interest and amortization of deferred financing costs;

•reclassification of direct acquisition transaction costs, retention bonuses and inventory fair value adjustments from the period incurred to periods these expenses would have been recognized given the assumed transaction date identified above; and

The following pro forma information has been prepared for comparative purposes only and is not necessarily indicative of the results of operations as they would have been had the Dana Kepner acquisition occurred on the assumed date, nor is it necessarily an indication of future operating results. In addition, the pro forma information does not reflect the cost of any integration activities, benefits from any synergies that may be derived from the Dana Kepner acquisition or revenue growth that may be anticipated.


	Three Months Ended		Nine Months Ended
	October 29, 2023		October 27, 2024		October 29, 2023
Net sales	$	1,915	$	5,772	$	5,519
Net income	156		368		448

As a result of integration of the Dana Kepner acquisition with existing operations of the Company it is impracticable to identify the discrete financial performance associated with the Dana Kepner acquisition. As such, the Company has not presented the post-acquisition net sales and net income for the Dana Kepner acquisition.