Acquisitions

12 Months Ended

Jul. 31, 2025

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Acquisitions

Note 16. Acquisitions

The Company acquired nine and ten businesses during fiscal 2025 and 2024, respectively. Each of the acquired businesses is generally engaged in the distribution of plumbing, HVAC or infrastructure related products and was acquired to support growth. In each of the Company’s acquisitions, the Company has purchased substantially all of the acquiree’s business and therefore all transactions have been accounted for as a business combination pursuant to FASB Accounting Standards Codification (ASC) 805.

The following table summarizes the preliminary purchase price allocation for the assets acquired and liabilities assumed in regards to the Company’s respective acquisitions having occurred as of July 31 in fiscal 2025 and 2024:

	Acquisitions occurring in fiscal
(In millions)	2025	2024
Cash and cash equivalents	$2	$1
Receivables and other assets	44	53
Inventories	48	50
Property, plant and equipment	3	6
Operating lease right-of-use assets	14	11
Customer relationships intangible assets	136	108
Other intangible assets	16	15
Trade and other payables	(24)	(41)
Lease liabilities	(14)	(11)
Deferred tax	(4)	(7)
Other	—	(2)
Total	221	183
Goodwill	116	124
Consideration	$337	$307
Satisfied by:
Cash	$303	$261
Deferred consideration	34	46
Total consideration	$337	$307

The fair values of the assets acquired in fiscal 2025 are considered preliminary and are based on management’s best estimates. Further adjustments may be necessary in connection with acquisitions completed in fiscal 2025 when additional information becomes available during the measurement period about events that existed at the date of acquisition. There were no material adjustments in the current fiscal year that related to the closing of the measurement period of acquisitions made in the prior fiscal year. As of the date of this Annual Report, the Company has made all material adjustments related to acquisitions in fiscal 2025.

The fair value estimates of intangible assets are considered non-recurring, Level 3 measurements within the fair value hierarchy and are estimated as of each respective acquisition date.

The goodwill on these acquisitions is attributable to the anticipated profitability of the new markets and product ranges to which the Company has gained access and additional profitability, operating efficiencies and other synergies available in connection with existing markets. Goodwill acquired during fiscal 2025 that was attributed to the United States and Canada segments were $99 million (2024: $91 million) and $17 million (2024: $33 million), respectively. Goodwill acquired in fiscal 2025 that is expected to be deductible for tax purposes is $102 million (2024: $90 million).

Deferred consideration represents the expected payout due to the sellers of certain acquired businesses that is subject to either 1) a contractual settle-up period or 2) a contingency related to contractually defined performance metrics. If the deferred consideration is contingent on achieving performance metrics, the liability is estimated using assumptions regarding the expectations of an acquiree’s ability to achieve the contractually defined performance metrics over a period of time that typically spans one to three years. When ultimately paid, deferred consideration is reported as a cash outflow from financing activities.

The businesses acquired in fiscal 2025 contributed $112 million to net sales and $5 million in profit to the Company’s income before income tax, including acquired intangible asset amortization, transaction and integration costs for the period between the applicable date of acquisition and July 31, 2025. Acquisition costs in fiscal 2025 was $3 million (2024: $5 million). Acquisition costs are expensed as incurred and included in SG&A in the Company’s consolidated statements of earnings.

The net outflow of cash in respect of the purchase of businesses is as follows: 

	For the years ended July 31,
(In millions)	2025	2024
Purchase consideration	$303	$261
Cash, cash equivalents and bank overdrafts acquired	(2)	(1)
Cash consideration paid, net of cash acquired	301	260
Deferred and contingent consideration paid for prior years’ acquisitions(1)	41	44
Net cash outflow in respect of the purchase of businesses	$342	$304

(1) Included in other financing activities in the consolidated statements of cash flows

Pro forma disclosures

If each acquisition had been completed on the first day of the prior fiscal year, the Company’s unaudited pro forma net sales and income before income tax would have been:

	Year ended July 31,
(In millions)	2025	2024
Pro forma net sales for current year acquisitions	$30,966	$29,954
Pro forma income before income tax for current year acquisitions	2,427	2,476

	Year ended July 31,
(In millions)	2024	2023
Pro forma net sales for prior year acquisitions	$29,902	$30,140

The impact on income before income tax for prior year acquisitions in 2024 and 2023, including additional intangible asset amortization, transaction and integration costs, would not be material.

The unaudited pro forma results presented herein do not necessarily represent financial results that would have been achieved had the acquisition actually occurred at the beginning of the prior fiscal year.