Astec to acquire TerraSource for $245M in cash

Under the terms of the definitive agreement, Astec (ASTE) will acquire TerraSource for $245.0 million in cash, subject to a customary working capital adjustment. Based on 2024 financial information, we anticipate an adjusted EBITDA multiple of 5.9x adjusted for expected tax benefits of approximately $15 million and annual run-rate synergies of approximately $10 million expected by the end of year two. Astec intends to finance the acquisition with existing cash on hand and new committed financing. The transaction is expected to close early in the third quarter of 2025, subject to requisite regulatory approvals and satisfaction of other customary closing conditions. Strategic and Financial Benefits:Increases aftermarket and recurring revenue growth profile. TerraSource has a large installed base with 2024 aftermarket revenues approximating 60% of total revenue and 80% of gross profit; Adds scale and expands global market presence in attractive end markets for further growth opportunities; Provides an enhanced financial profile with accretion expected in gross profit margins, adjusted EBITDA margins and earnings per share; Enables meaningful run-rate cost synergies of approximately $10 million primarily from procurement savings; Strong cultural fit focused on innovation, sustainability and customer-centric solutions