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Acquisitions
 6 Months Ended
Jun. 30, 2025
Business Combination [Abstract]  
Acquisitions Acquisitions
Acquisition of M&C
On May 6, 2025, the Company acquired 100% of the common stock of M&C in an all-cash transaction valued at approximately $188 million, net of cash acquired.
Headquartered in Ratingen, Germany, M&C provides a comprehensive range of gas analysis systems that detect, measure and monitor gases in critical environments. The company's product portfolio includes systems and solutions for gas sampling, gas conditioning, as well as advanced process control. M&C products and systems are used in a wide range of industries and applications, including energy, chemicals, utilities, manufacturing, food and beverage, and other industrial applications.
M&C’s operating results are included in our unaudited condensed consolidated financial statements from the acquisition date within the Americas and International reportable segments. The acquisition qualified as a business combination and was accounted for using the acquisition method of accounting.
The following table summarizes the preliminary fair values of the M&C’s assets acquired and liabilities assumed at the date of the acquisition:
(In millions)May 6, 2025
Current assets (including cash of $10.0)
$39.3 
Property, plant and equipment and other noncurrent assets46.8 
Customer relationships and other intangible assets$66.6 
Goodwill91.0 
Total assets acquired$243.7 
Deferred tax liability$(24.0)
Other liabilities(21.9)
Total liabilities assumed$(45.9)
Net assets acquired$197.8 
As of June 30, 2025, the purchase accounting for M&C is subject to change upon completion of the valuation of the assets acquired and liabilities assumed, primarily for tax balances, valuation of intangible assets as well as final working capital adjustment and allocation of goodwill.
Assets acquired and liabilities assumed in connection with the acquisition were recorded at their preliminary fair values. Fair values were determined by management, based in part on an independent valuation performed by a third-party valuation specialist. The valuation methods used to determine the fair value of intangible assets included the excess earnings approach for customer relationships using customer inputs and contributory charges; the relief from royalty method for trade name and developed technologies and the cost approach for assembled workforce, which is included in goodwill. Several significant assumptions and estimates were involved in the application of these valuation methods, including forecasted sales volumes and prices, royalty rates, costs to produce, tax rates and amortization tax benefits, capital spending, discount rates, customer attrition rates, technology obsolescence assumptions and working capital changes. Cash flow forecasts were generally based on M&C pre-acquisition forecasts, coupled with estimated MSA financial synergies. Identifiable intangible assets with finite lives are subject to amortization over their estimated useful lives. The customer relationships, developed technology, and trade name acquired in the M&C transaction are being amortized over periods of 20 years, 8 years, and 20 years, respectively. Estimated future amortization expense related to the identifiable intangible assets is approximately $2 million for the remainder of 2025, approximately $4 million annually for 2026 through 2029, and $47.8 million thereafter.
Goodwill was calculated as the excess of the purchase price over the fair value of net assets acquired and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Among the factors that contributed to a purchase price in excess of the fair value of the net tangible and intangible assets acquired were the acquisition of an assembled workforce, the expected synergies and other benefits that we believe will result from combining the operations of M&C with our operations. Goodwill of $91.0 million related to the M&C acquisition was recorded, with $63.7 million and $27.3 million allocated to the International and Americas reportable segments, respectively. This Goodwill is nondeductible for tax purposes.
Our results for the three and six months ended June 30, 2025, include strategic acquisition costs of $6.6 million and $8.1 million, respectively, including costs related to the M&C acquisition. Our results for the three and six months ended June 30, 2024, include none and $0.2 million, respectively, of acquisition related costs. These costs are reported in selling, general, and administrative expenses.
The operating results of this acquisition have been included in our unaudited condensed consolidated financial statements from the acquisition date through June 30, 2025. Our results for the three and six months ended June 30, 2025, include sales and net loss of $10.8 million and $4.8 million, respectively, attributable to this acquisition.
The following unaudited pro forma information presents our combined results as if the M&C acquisition had occurred on January 1, 2024. The unaudited pro forma financial information was prepared to give effect to events that are (1) directly attributable to the acquisition; (2) factually supportable; and (3) expected to have a continuing impact on the combined company's results. There were no material transactions between MSA and M&C during the periods presented that are required to be eliminated in the unaudited pro forma condensed combined financial information. The unaudited pro forma condensed combined financial information does not reflect any cost savings, operating synergies, or revenue enhancements that the combined companies may achieve as a result of the acquisition or the costs to integrate the operations or the costs necessary to achieve cost savings, operating synergies, or revenue enhancements.
Three Months Ended June 30,Six Months Ended June 30,
(In millions, except per share amounts)2025202420252024
Net sales$478.7 $476.5 $914.0 $903.5 
Net income63.4 74.1 124.8 134.0 
Basic earnings per share1.61 1.88 3.18 3.40 
Diluted earnings per share1.61 1.87 3.17 3.39 
The unaudited pro forma condensed combined financial information is presented for informational purposes only and is not intended to represent or be indicative of the combined results of operations or financial position that we would have reported had the acquisition been completed as of the date and for the periods presented, and should not be taken as representative of our unaudited condensed consolidated results of operations or financial condition following the acquisition. In addition, the unaudited pro forma condensed combined financial information is not intended to project the future financial position or result of operations of the combined company.
The unaudited pro forma condensed combined financial information was prepared using the acquisition method of accounting under existing U.S. GAAP. MSA has been treated as the acquirer.