Thermon (THR) investor relations material

Strategic rationale and combination benefits

• The merger brings together two companies with strong momentum, aiming for double-digit growth and 20%+ EBITDA margins over the next several years.

• The combination creates a "rule of 30, rule of 40" industrial company, rare in the sector, with significant scale and global opportunities.

• Both organizations have admired each other's market leadership and see the merger as a way to accelerate strategic plans and operational infrastructure, especially in Asia.

• The deal balances short, mid, and long-cycle business, enhancing resilience and growth potential.

• The merger is expected to unlock commercial and operational synergies, leveraging complementary product lines and customer relationships.

Commercial synergies and growth opportunities

• Significant overlap in product offerings enables cross-selling, especially in large power projects and industrial applications.

• The combined sales pipeline is $6.5 billion, with enhanced insight into customer needs for the next two years.

• Thermon's expertise in heat tracing and emission monitoring complements the partner's power sector relationships, opening new OEM channels.

• Recent weeks have already seen joint bids and product specifications, indicating immediate commercial traction.

• The controls platform and digitalization initiatives are key areas for future investment and synergy.

Portfolio transformation and market positioning

• Thermon has shifted from 65% oil and gas revenue to 28-30%, with 83% now recurring OpEx, reflecting a successful diversification strategy.

• Over 70% of revenues now come from non-oil and gas sectors, including industrial, chemical, power, food, rail, and semiconductor markets.

• New product launches in medium voltage and liquid load banks target growth in electrification and data centers, supporting 5-7% incremental growth.

• Customer CapEx spending is up 26%, with record engineering backlogs and strong secular growth drivers expected for the next 3-5 years.

• The business is positioned for double-digit growth through fiscal 2027, driven by macro trends and portfolio repositioning.