Digi International (DGII) investor relations material

Deal rationale and strategic fit

• Acquisition integrates advanced, proprietary wireless sensing technology, enhancing analytics and AI capabilities for enterprise-scale data interpretation.

• Expands presence into Europe, leveraging Disruptive Technologies' customer relationships in over 25 countries and Oslo headquarters.

• Enables entry into new markets such as building automation, occupancy, and reinforces verticals in food, health, office, and manufacturing.

• Integration with SmartSense AI and analytics enhances customer solutions and market reach.

• Positions the combined entity as a leader in physical world intelligence and enterprise AI-driven IoT solutions.

Financial terms and conditions

• Definitive agreement signed September 30, 2026, to acquire Disruptive Technologies for $130 million in cash, funded through an existing revolving credit facility.

• Disruptive Technologies generated $15 million in revenue and $4 million in annualized recurring revenue in 2025.

• Transaction adds under 1x leverage to gross outstanding debt, with disciplined debt repayment planned.

• Contribution to be included in fiscal 2027 guidance, announced in Q4 2026 earnings.

Synergies and expected cost savings

• Integration expected to deliver $9 million incremental adjusted EBITDA and free cash flow in fiscal 2028.

• Synergies primarily from economies of scale in R&D, manufacturing, and go-to-market integration, with cost-side benefits more significant.

• High-density sensor architecture and long battery life reduce operational costs.

• Integration of proprietary edge sensor technology with SmartSense AI and digital workflows creates a trusted data foundation.