Brady (BRC) investor relations material

Deal rationale and strategic fit

• Acquisition of Honeywell's Productivity Solutions and Services (PSS) expands portfolio into data capture, mobility, and workforce solutions, complementing strengths in printing, software, and specialty adhesive materials.

• Expands total addressable market by $9 billion through entry into new verticals and non-overlapping product categories, leveraging automation and digitization trends.

• Diversifies business profile, with significant exposure to retail, logistics, and warehousing, and enhances commercial collaboration opportunities.

• Creates a platform for high-margin recurring software and service revenue, leveraging a large installed base and over 3 million devices under service contracts.

• PSS's focus on R&D and innovation aligns with the acquirer's strategy, with 70% of revenue from products launched in the last three years.

Financial terms and conditions

• All-cash transaction valued at $1.4 billion, representing approximately 8x EBITDA for the twelve months ended December 31, 2025.

• PSS generated $1.1 billion in revenue for the 12 months ending December 31, 2025.

• Funded with cash on hand and new debt, with net debt-to-EBITDA expected at 2.5x to 2.8x at close, targeting deleveraging below 2.0x within two years.

• Expected to be double-digit accretive to adjusted diluted EPS within the first year post-close.

Synergies and expected cost savings

• At least $25 million in annual run-rate cost synergies anticipated within three years, mainly from operational efficiencies.

• Incremental revenue synergies expected from cross-selling and commercial execution, not fully included in initial estimates.

• High-margin software and service offerings to increase recurring revenue and improve long-term margin profile.