Hammond Power Solutions (HPS) M&A announcement summary

Deal rationale and strategic fit

• Acquisition expands integrated electrical solutions, power quality, and product capabilities, enhancing offerings for industrial, infrastructure, and energy transition sectors.

• Increases exposure to high-growth markets such as offshore wind, green hydrogen, nuclear, data, and IT, and broadens end-market reach.

• Broadens global commercial footprint, leveraging AEG Power Solutions' presence in Europe and Asia for diversified growth and cross-selling opportunities.

• Adds a large installed base, increasing recurring services and aftermarket revenues for greater business resilience.

• Aligns with long-term megatrends in electrification, energy transition, and energy security.

Financial terms and conditions

• All-cash transaction with an enterprise value of CAD 365 million (C$365 million / $365 million).

• Funded through a new committed syndicated debt arrangement, including a term loan and revolving credit facility.

• Expected net leverage at closing is about 2.7x pro forma trailing twelve months.

• Transaction expected to close in Q2 2026, subject to customary regulatory approvals and closing conditions.

• Anticipated to be accretive to adjusted EPS in the first full year, with returns on invested capital exceeding cost of capital.

Synergies and expected cost savings

• Early integration will focus on commercial collaboration, cross-selling, and market access rather than operational synergies.

• Over time, scale and operating leverage expected to improve margins, especially as aftermarket and service revenues grow.

• Procurement and operating efficiencies anticipated as the partnership matures.

• Complementary product offerings expand power infrastructure solutions and enable delivery of fully integrated electrical powertrain solutions.