ESAB Corp 8-K

What Happened

• ESAB Corporation (ESAB) announced on January 31, 2026 that its wholly owned indirect subsidiary, 9559-2796 Québec Inc., entered a Share Purchase Agreement to buy all issued and outstanding shares of Eddyfi Holding Inc. for aggregate cash consideration of $1.45 billion, subject to customary purchase price adjustments. ESAB signed the agreement to guarantee the purchaser’s obligations.
• ESAB obtained a commitment for a $1.0 billion, 364‑day senior unsecured bridge term loan from JPMorgan Chase to fund the cash consideration and related fees; commitments will be reduced dollar‑for‑dollar by net proceeds from certain pre‑closing financings or asset sales. Closing is targeted mid‑2026 and is subject to customary conditions, including regulatory approvals (U.S. HSR, Brazil, Canada, France, Italy, Australia, UK and others as required) and satisfaction or waiver of closing conditions. The agreement includes a November 30, 2026 outside date (with a potential three‑month extension in limited regulatory circumstances).
• Separately, on February 2, 2026 ESAB reported preliminary results for its fiscal fourth quarter and full year ended December 31, 2025 (press release furnished as Exhibit 99.1).

Key Details

• Purchase price: $1.45 billion in cash, subject to adjustments for cash, indebtedness, transaction expenses and net working capital at closing.
• Bridge financing: $1.0 billion 364‑day senior unsecured facility committed by JPMorgan Chase Bank, N.A., contingent on customary conditions and the closing of the Acquisition.
• Private placements (February 2, 2026):
  • 175,000 shares of 6.50% Series A Mandatory Convertible Preferred Stock for $175.0 million aggregate liquidation preference (net proceeds to ESAB ~ $171.5M). Purchasers include entities affiliated with Mitchell Rales ($100M) and Steven Rales ($25M).
  • 1,254,255 shares of common stock for $142,985,070 (offered at $114.00/share; net proceeds ~ $140.1M).
  • Both offerings relied on Section 4(a)(2) private placement exemptions and securities will not be registered under the Securities Act.

Why It Matters

• The proposed Eddyfi acquisition is a material strategic transaction with a sizeable cash outlay that will change ESAB’s business footprint and balance sheet. The committed bridge facility and the private placements indicate how ESAB plans to fund the deal, but the transaction still depends on regulatory approvals and customary closing conditions.
• Investors should note potential near‑term impacts: increased leverage while the bridge loan is outstanding, possible dilution from the mandatory convertible preferred and newly issued common shares, and the risk that regulatory reviews or unmet closing conditions could delay, modify or prevent the Acquisition. ESAB’s preliminary Q4 and FY2025 results were furnished but full reported financials and additional disclosures should be reviewed when released.