The 8-K/A provides the financial statements and pro forma data for the PSS acquisition that closed in August. The key watch item is the pace of revenue and earnings integration: PSS's standalone revenue declined 4.6% YoY in 2025 and its H1 2026 net income dropped 57.4% YoY, while Brady's pro forma EPS is cut by more than half. Monitor the next 10-Q for actual combined results and any synergy realization or guidance updates.
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Executive Summary
Brady Corporation filed this 8-K/A to provide the audited and unaudited financial statements of Honeywell's Productivity Solutions and Services (PSS) business, which it acquired on August 3, 2026 for a base purchase price of $1.4 billion in cash. The acquisition was funded with a combination of cash on hand, a $500.0 million term loan, approximately $304.7 million drawn on a new revolving credit facility, and $800.0 million in senior notes. Pro forma combined net income for the year ended July 31, 2026 is $84.2 million, down from Brady's standalone net income of $205.4 million, reflecting incremental interest expense of $84.2 million and additional amortization of $110.9 million from the acquired intangibles.
Key Facts
- Brady completed the acquisition of Honeywell's Productivity Solutions and Services business on August 3, 2026 for a base purchase price of $1.4 billion in cash.
- Total consideration paid at closing was $1,432.7 million, net of cash received and subject to post-closing adjustments.
- The acquisition was financed with $500.0 million term loan, $304.7 million revolver draw, $800.0 million senior notes (5.43%-5.90%), and cash on hand.
- Pro forma combined net income for FY ended July 31, 2026 is $84.2 million vs. Brady standalone $205.4 million.
- Pro forma diluted EPS is $1.75 (Class A) and $1.73 (Class B), down from Brady standalone $4.30 and $4.29.
- PSS had net sales of $1,147 million in 2025 (down 4.6% from $1,202 million in 2024) and net income of $105 million (down 37.1% from $167 million).
- PSS's unaudited H1 2026 net sales were $566 million (up 1.6% from $557 million) but net income fell to $26 million from $61 million.
- Brady recorded $913.8 million of goodwill and $720.0 million of identifiable intangible assets in the preliminary purchase price allocation.
- Pro forma adjustments include $84.2 million of additional interest expense and $110.9 million of additional amortization annually.
Financial Impact
Pro forma net income declines by $121.2 million from Brady standalone, driven by $84.2 million incremental interest and $110.9 million incremental amortization. PSS contributed $1,155.9 million in revenue but only $69.3 million in net income on a standalone basis for the trailing twelve months.
Risk Factors
- PSS revenue declined 4.6% in 2025 and net income fell 37.1%, indicating a weakening business that Brady is acquiring.
- Pro forma EPS is significantly diluted ($1.75 vs. $4.30 standalone) due to acquisition financing costs and amortization of intangibles.
- PSS's H1 2026 net income fell 57.4% YoY to $26 million despite a slight revenue increase, suggesting margin compression.
- The purchase price allocation is preliminary and subject to material revision during the measurement period.
- Brady added $1.6 billion in debt, increasing financial leverage and interest expense.
Investment Themes
Documents Analyzed
This report is based on 8 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K/A Filing (Primary) | 0000746598-26-000049 |
| Exhibit: exhibit993-unauditedprofor.htm | 0000746598-26-000049 |
| Exhibit: exhibit992-unauditedconden.htm | 0000746598-26-000049 |
| Exhibit: exhibit231consentofdeloitt.htm | 0000746598-26-000049 |
| Document: brc-20260803.htm | 0000746598-26-000049 |
| Document: 0000746598-26-000049-index-headers.html | 0000746598-26-000049 |
| Document: 0000746598-26-000049-index.html | 0000746598-26-000049 |
| Document: 0000746598-26-000049.txt | 0000746598-26-000049 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 16, 2026 11d ago | 8-K/A | $81.93 | awaiting T+60 | — | $82.31 (+0.46%) |
Oct 6, 2026 20d ago | 144 | $85.11 | awaiting T+60 | — | $82.31 (−3.30%) |
Oct 6, 2026 21d ago | 144 | $85.11 | awaiting T+60 | — | $82.31 (−3.30%) |
Sep 3, 2026 7w ago | 8-K | $90.34 | awaiting T+60 | — | $82.31 (−8.89%) |
Sep 3, 2026 7w ago | Press Release | $90.34 | awaiting T+60 | — | $82.31 (−8.89%) |
Sep 2, 2026 7w ago | Press Release | $90.34 | awaiting T+60 | — | $82.31 (−8.89%) |
Aug 22, 2026 9w ago | Institutional Cluster | $94.38 | awaiting T+60 | — | $82.31 (−12.79%) |
Aug 21, 2026 9w ago | Press Release | $91.29 | awaiting T+60 | — | $82.31 (−9.84%) |
Jun 18, 2026 18w ago | 8-K | $85.31 $86.44 | ▲ +1.32% | ▼ −0.57% | $82.31 (−3.52%) |
Jun 11, 2026 19w ago | Insider Buy | $81.17 $90.21 | ▲ +11.14% | ▲ +6.74% | $82.31 (+1.40%) |
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