LSI Industries (LYTS) investor relations material

Deal rationale and strategic fit

• Acquisition creates a leading integrated retail branding solutions platform, expanding offerings in lighting, fixtures, signage, display cases, and new categories such as refrigerated, millwork, and metal displays.

• Expands presence in high-value verticals like refueling, C-stores, grocery, and QSRs, aligning with a scalable platform strategy.

• Minimal customer overlap increases market reach and cross-selling opportunities, enhancing importance with large accounts.

• Royston’s recurring revenue model and long-term customer relationships add stability and growth potential.

• Retention of Royston leadership ensures cultural and operational continuity during integration.

Financial terms and conditions

• Aggregate purchase price of $325 million: $320 million in cash and $5 million in common stock, subject to working capital adjustment.

• Transaction price represents 8.1x trailing 12 months Adjusted EBITDA as of September 2025, net of tax benefits.

• Supported by a fully committed bridge facility; permanent financing to include a mix of equity and debt.

• Transaction is expected to be immediately accretive to margin rate and diluted EPS upon closing.

• Pro-forma net leverage expected at or below 3.0x at closing, with a plan to reduce to at or below 2.0x by fiscal 2028.

Synergies and expected cost savings

• Significant cross-selling and commercial synergy opportunities due to minimal customer overlap and complementary offerings.

• Cost synergies expected from manufacturing optimization, procurement leverage, and SG&A efficiencies.

• Pre-synergy, acquisition expected to create 130 basis points of EBITDA margin expansion and improve pro-forma margin profile.

• Opportunity to expand per-site content and leverage Royston's capabilities within the legacy customer base.

• Combined businesses serve largely distinct customer bases, enhancing synergy potential.