Karman (KRMN) M&A Announcement summary

Deal rationale and strategic fit

• Expands into high-priority maritime defense by acquiring Seemann Composites and MSC, leaders in advanced composite systems for submarines, UUV/USV, and naval platforms, addressing all four physical domains: sea, ground, air, and space.

• Deepens advanced materials IP portfolio and adds a specialized material science team for next-generation materials.

• Significantly increases exposure to top Department of War naval programs and multi-decade, funded U.S. Navy initiatives, supporting long-term growth.

• Highly complementary offerings and aligned cultures, enabling cross-market technology leverage and providing IP-rich, engineered solutions for critical defense systems.

• Acquisition aligns with a strategy to deliver advanced systems for national security interests from deep sea to deep space.

Financial terms and conditions

• Total consideration of $220 million: $210 million in cash and $10 million in stock/common shares.

• Expected LTM net leverage ratio of approximately 3x adjusted EBITDA by year-end 2026.

• Transaction is immediately accretive to revenue, EBITDA, EPS, and cash flow, with management affirming prior fiscal year 2025 guidance.

Synergies and expected cost savings

• Integration enables cross-selling of new products and technologies across an expanded customer base and markets.

• Seemann's expertise in composites and resins enhances materials science capabilities, supporting maritime, missile/rocket, and hypersonics applications.

• Opportunity to in-source 3D printing, fiber weaving, and AFP for advanced systems, enhancing vertical integration.

• Margin expansion expected as developmental contracts transition to production and firm-fixed pricing.

• Strengthens position in advanced materials and acoustic coatings for naval applications.