Acquisitions and Divestitures

3 Months Ended

Jan. 30, 2026

Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]

Acquisitions and Divestitures

2 Acquisitions and Divestitures

Tornado Infrastructure Equipment Ltd. ("Tornado Infrastructure Equipment")

On December 8, 2025 ("closing date"), pursuant to an Arrangement Agreement ("Purchase Agreement") dated October 6, 2025, the company completed its acquisition of Tornado Infrastructure Equipment, a publicly held Canadian company and a manufacturer in the hydrovac excavation solutions industry. Tornado Infrastructure Equipment manufactures hydrovac excavation solutions and industrial equipment solutions for the underground construction, power transmission and energy markets and provides innovative product offerings that broaden and strengthen the company's Professional segment and expands its dealer network.

The Tornado Infrastructure Equipment acquisition was structured as an equity purchase, pursuant to which the company acquired 100 percent of the equity interests of the legal entities that comprised Tornado Infrastructure Equipment, with the legal entities continuing as surviving entities and wholly-owned subsidiaries of the company. As part of the acquisition, the company also acquired the real property used by Tornado Infrastructure Equipment. The cash consideration, net of cash acquired, was $210.3 million ("purchase price"). The company funded the purchase price with borrowings under its existing revolving credit facility. As a result of the acquisition, the company incurred approximately $2.2 million of acquisition-related transaction costs during the three-month period ended January 30, 2026. Acquisition-related transaction costs are recorded within selling, general and administrative expense within the Condensed Consolidated Statements of Earnings.

Preliminary Fair Value Measurements

The Company accounted for the acquisition in accordance with the accounting standards codification guidance which requires identifiable assets acquired and liabilities assumed to be measured at their estimated fair values as of the closing date. The company believes that the information available as of the closing date provides a reasonable basis for estimating fair values of the assets acquired and liabilities assumed; however, the company is continuing to finalize these amounts. Thus, the preliminary measurements of the fair values of the assets acquired and liabilities assumed within the preliminary purchase price allocation are subject to change as additional information becomes available and as additional analysis is performed. The company expects to finalize its preliminary valuation and complete the allocation of the preliminary purchase price as soon as practicable, but no later than one year from the closing date of the acquisition, as required.

The following table summarizes the preliminary estimated fair values assigned to the assets acquired and liabilities assumed. These preliminary fair values are based on internal company and independent external third-party valuations and are subject to change as certain asset and liability valuations are finalized:

(Dollars in millions)	December 8, 2025
Cash and cash equivalents	$	21.3
Receivables	5.4
Inventories	36.7
Prepaid expenses and other current assets	3.7
Property, plant, and equipment, net	14.8
Right-of-use assets, net	2.6
Goodwill	137.6
Other intangible assets:	63.8
Indefinite-lived trade name	19.6
Finite-lived developed technology	9.8
Finite-lived customer-related	29.5
Finite-lived backlog	4.9
Deferred income tax assets	0.1
Accounts payable	(13.8)
Accrued liabilities	(18.5)
Short-term lease liabilities	(0.8)
Long-term lease liabilities	(2.4)
Deferred income tax liabilities	(18.9)
Total fair value of net assets acquired	231.6
Less: cash and cash equivalents acquired	(21.3)
Total purchase price	$	210.3

The goodwill recognized is primarily attributable to the value of the workforce, the reputation of Tornado Infrastructure Equipment, expected future cash flows, and expected synergies, including customer and dealer growth opportunities, integrating and expanding existing product lines, and cost reduction initiatives. Key areas of expected cost reduction synergies include increased purchasing power for commodities, components, parts, and supply chain consolidation. The goodwill resulting from the acquisition of Tornado Infrastructure Equipment was recognized within the company's Professional segment and is the primary driver for the increase in the company's Professional segment goodwill to $582.1 million as of January 30, 2026 from $440.9 million as of October 31, 2025. Goodwill is non-deductible for tax purposes.

Other Intangible Assets Acquired

As mentioned above, the company has yet to substantially complete its analysis and valuation for measuring the fair values of the acquired other intangible assets. The company expects to finalize its preliminary valuation of other intangible assets as soon as practicable, but no later than one year from the closing date of the acquisition, as required. The preliminary allocation of the purchase price to the net assets acquired resulted in the recognition of $63.8 million of other intangible assets as of the closing date. The useful lives of the developed technology, customer-related, and backlog intangible assets were determined based on the period of expected cash flows used to measure the fair value of the respective intangible assets adjusted as appropriate for entity-specific factors including legal, regulatory, contractual, competitive, economic, and/or other factors that may limit the useful life of the respective intangible asset.

Amortization expense for the finite-lived intangible assets resulting from the acquisition of Tornado Infrastructure Equipment for the three-month period ended January 30, 2026 was $2.6 million.

Results of Operations

Tornado Infrastructure Equipment's results of operations are included within the company's Professional reportable segment in the company's Condensed Consolidated Financial Statements from the closing date. For the three-month period ended January 30, 2026, the company recognized $19.0 million of net sales from Tornado Infrastructure Equipment's operations. Tornado Infrastructure Equipment's operations had an immaterial impact on Professional segment earnings for the three-month period ended January 30, 2026. Unaudited pro forma financial information is not disclosed as the Tornado Infrastructure Equipment acquisition was not considered material to the company's Consolidated Results of Operations.