Motors & Armatures Parts Acquisition Highlights (Form 8-K)

Motors & Armatures Parts Acquisition Highlights

Dallas, Texas - October 1, 2025 - CSW Industrials, Inc. (NYSE: CSW) announced today the execution of a definitive agreement under which CSW will acquire Motors & Armatures Parts ("MARS Parts") for $650 million in cash, subject to customary closing adjustments. The transaction also includes an earn-out to pay up to $20 million based on the achievement of revenue targets in the year after closing. The proposed cash purchase price, excluding earn-out, represents 10.5x pro-forma TTM EBITDA adjusted for identified synergies and is approximately 12.5x MARS Parts' estimated adjusted TTM EBITDA of $51.8 million. CSW anticipates funding the transaction with a combination of a Syndicated Term Loan A and borrowings under its existing $700 million revolving credit facility, with closing expected to occur in the third quarter of CSW's 2026 fiscal year following the satisfaction of customary closing conditions, including the expiration or termination of any waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

MARS Parts is one of the largest distributors of HVAC/R parts and supplies in North America, and a leading provider of motors and capacitors. MARS Parts has U.S.-based manufacturing exposure as well as strong contract manufacturing partners to provide a comprehensive line of HVAC/R electrical products. With a product mix more heavily focused on repair versus replacement, MARS Parts will strategically complement our current Contractor Solutions business, which traditionally has been more focused on new unit installations and replacements. We believe that this acquisition will allow us to capitalize on our clear competitive advantage by adding complementary products to CSW's current dynamic portfolio. The acquisition excludes the equipment segment of the existing Motors & Armatures business.

CSW expects that the newly combined organization will have the ability to provide the best customer experience in the industry with a leadership position in the prevailing product categories for residential HVAC/R. CSW also expects the acquisition to lead to significant cost synergies through leveraging the existing CSW and Contractor Solutions leadership team and manufacturing and distribution footprint, optimizing facilities, scaling supply chains, and reducing duplicative spending. Through currently-identified cost synergies, CSW expects the MARS Parts business to achieve a 30+% adjusted EBITDA margin run rate within twelve months after closing the transaction.

Joseph B. Armes, Chairman, President, and Chief Executive Officer of CSW Industrials, said, "I am pleased to announce that we have entered into a definitive agreement to acquire MARS Parts, a leading provider of motors, capacitors, and other HVAC/R solutions. This acquisition will expand our existing HVAC/R product portfolio with highly complementary offerings and enhance our value proposition in the HVAC/R end market. CSW is uniquely positioned to accelerate the growth of these products through our market knowledge, customer focus, and investment in people, systems, and processes. We believe that this highly strategic acquisition will enable us to drive above-market profitable growth, enhance long-term shareholder value, and stay well within our stated leverage target, at approximately 2.0x EBITDA per the estimated credit agreement calculation, upon closing. MARS Parts is expected to meaningfully grow CSW's already strong cash flow, which will allow us to continue to pursue growth opportunities and pay down debt."

Jeff Underwood, Senior Vice President of CSW Industrials and General Manager, Contractor Solutions, commented, "I am thrilled that the MARS Parts business will be joining the RectorSeal family and enhancing our offering of premium, high-quality HVAC/R products. They have commercial strength in product categories where we currently do not participate, with a mix that skews heavily toward repair to complement our existing portfolio. The combined organization will provide a more robust and fulsome product portfolio that will allow us to better serve distributors and contractors with additional high value products. This investment will allow us to better serve HVAC/R distributors."

During the second fiscal quarter of 2026, CSW paid down $35 million of debt to end the quarter with $60 million outstanding on our revolving credit facility. The company also repurchased approximately $18.3 million of stock under our existing share repurchase program.

A presentation with more information about the MARS Parts acquisition is available on CSW's website at https://cswindustrials.gcs-web.com.