Kadant (KAI) investor relations material

Deal rationale and strategic fit

• Acquisition targets a long-standing, mission-critical supplier and market leader with patented processes and a 150-year history, enhancing the industrial processing portfolio and strengthening focus on parts and consumables.

• The acquired company has been a valued supplier and partner for over thirty years, ensuring strong business familiarity and operational excellence.

• The deal supports long-term growth strategy, leverages robust processes and safety culture, and aligns with recurring revenue goals.

• The acquired company’s expertise in near-net-shape rolling and niche solutions aligns with strategic goals and reduces downstream costs.

• The business will operate as a standalone division, maintaining its location and management, and will be integrated into the industrial processing segment.

Financial terms and conditions

• Purchase price is approximately EUR 157 million, subject to customary adjustments.

• The acquired company generated about EUR 52 million in revenue and EUR 15.6 million in adjusted EBITDA for fiscal 2025.

• Transaction EBITDA multiple is about 10x, reduced to 8.5x after tax benefits.

• Funded primarily through borrowings under a European revolving credit facility, with leverage ratio rising to just above 2 and borrowing rate estimated at 3.5% in 2026.

• Approximately 45% of revenue was generated from existing business relationships.

Synergies and expected cost savings

• Integration expected to improve gross and EBITDA margins, with near-net-shape technology reducing machining and processing costs.

• Highly complementary fit with existing product lines, enabling cross-selling, operational efficiencies, and technical innovation.

• Opportunities to expand sales both within the acquiring company and globally to new customers.