In June 2022, the Company acquired certain assets and assumed certain liabilities of Engman-Taylor Company, Inc. (“Engman-Taylor”), a Menomonee Falls, Wisconsin-based distributor of metalworking tools and supplies, for aggregate consideration of $24,838, which includes a post-closing working capital adjustment in the amount of $661 that was paid to the Company in August 2022. Total cash consideration funded by the Company came from available cash resources and borrowings under the Amended Revolving Credit Facility (as defined below) (see Note 9, “Debt”).

Engman-Taylor serves customers from offices in Wisconsin, Illinois and North Carolina. The Company believes the acquisition enhances its leadership position in metalworking and aligns with the Company’s focus of providing a high level of service to its customers. The Company plans to provide Engman-Taylor’s customer base access to the Company’s product portfolio, inventory management, and other supply chain solutions.


Inventories	$	5,276
Accounts receivable		11,071
Prepaid expenses and other current assets		209
Identifiable intangibles		4,800
Goodwill		6,173
Property, plant and equipment		1,751
Long-term assets		129
Total assets acquired	$	29,409
Accounts payable		3,826
Accrued liabilities		745
Total liabilities assumed	$	4,571
Total purchase price consideration	$	24,838

Acquired identifiable intangible assets with a fair value of $4,800 consisted of customer relationships of $3,900 with a useful life of 10 years and trade names of $900 with a useful life of five years. The goodwill amount of $6,173 represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. The primary items that generated the goodwill were the premiums paid by the Company for the right to control the business acquired and the benefit from adding a highly complementary provider of metalworking tools and supplies. This goodwill will not be amortized and will be included in the Company’s periodic test for impairment at least annually. The goodwill is deductible for income tax purposes.

The amount of revenue and income before provision for income taxes from Engman-Taylor included in the Company’s Consolidated Statement of Income for fiscal year 2022 was $18,774 and $521, respectively. In addition, the Company incurred non-recurring transaction and integration costs relating to Engman-Taylor totaling $211, which are included in Operating expenses in the Company’s Consolidated Statement of Income for fiscal year 2022.

In August 2022, the Company, through its subsidiary, All Integrated Solutions, Inc., acquired 100% of the outstanding shares of privately held Tower Fasteners, LLC (“Tower Fasteners”), a Holtsville, New York-based distributor of Original Equipment Manufacturer (“OEM”) fasteners and components. Total cash consideration was $33,867, which includes a post-closing working capital adjustment in the amount of $1,029 that is subject to finalization. Total cash

consideration funded by the Company came from available cash resources and borrowings under the Amended Revolving Credit Facility (see Note 9, “Debt”).

Tower Fasteners serves customers from eight locations along the East Coast and in the Southwestern regions of the United States, Mexico and Europe. The acquisition expands the Company’s presence in the OEM fastener market and the Company plans to provide Tower Fasteners’ customer base access to the Company’s product portfolio to support their full metalworking and MRO needs.

This acquisition was accounted for as a business acquisition pursuant to ASC Topic 805. As required by ASC Topic 805, the Company allocated the consideration to assets and liabilities based on their estimated fair value at the acquisition date. The Company’s acquisition accounting as of September 3, 2022 is preliminary primarily due to the pending final valuation and any additional working capital adjustments to the purchase price. The following table summarizes the amounts of identified assets acquired and liabilities assumed based on the estimated fair value at the acquisition date:


Cash and cash equivalents	$	840
Inventories		6,894
Accounts receivable		4,522
Prepaid expenses and other current assets		355
Identifiable intangibles		19,500
Goodwill		12,247
Property, plant and equipment		174
Other assets		833
Total assets acquired	$	45,365
Accounts payable		3,136
Accrued expenses and other current liabilities		4,103
Deferred income taxes and tax uncertainties		4,259
Total liabilities assumed	$	11,498
Total purchase price consideration	$	33,867

Acquired identifiable intangible assets with a fair value of $19,500 consisted of customer relationships of $18,700 with a useful life of 10 years, a trademark of $600 with a useful life of five years and noncompetition agreements of $200 with a useful life of five years. The goodwill amount of $12,247 represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired and noncontrolling interest. The primary items that generated the goodwill were the premiums paid by the Company for the right to control the business acquired and the benefit from adding a highly complementary provider of OEM fasteners and components. This goodwill will not be amortized and will be included in the Company’s periodic test for impairment at least annually. The goodwill is deductible for income tax purposes.

The amount of revenue and income before provision for income taxes from Tower Fasteners included in the Company’s Consolidated Statement of Income for fiscal year 2022 was $4,127 and $412, respectively. In addition, the Company incurred non-recurring transaction and integration costs relating to Tower Fasteners totaling $665, which are included in Operating expenses in the Company’s Consolidated Statement of Income for fiscal year 2022.

Fiscal Year 2021 Acquisitions

Acquisition of Hurst

In June 2021, the Company acquired 80% of the outstanding shares of privately held Wm. F. Hurst Co., LLC (“Hurst”), a Wichita, Kansas-based distributor of metalworking tools and supplies with deep expertise and customer relationships in the aerospace industry. The portion of the consideration attributable to the Company was $15,301, which includes the Company’s portion of a post-closing working capital adjustment in the amount of $101 that was paid to the sellers of Hurst in August 2021. Total cash consideration funded by the Company came from available cash resources and borrowings under the Amended Revolving Credit Facility (see Note 9, “Debt”).

Acquisition of Certain Assets of TAC

In February 2019, two subsidiaries of which the Company holds a 75% interest, MSC IndustrialSupply, S. de R.L. de C.V. and MSC Import Export LLC (together, “MSC Mexico”), completed the acquisition of certain assets of TAC Insumos Industriales, S. de R.L. de C.V. and certain of its affiliates (together, “TAC”). The portion of the consideration

attributable to the Company was $13,911, which includes the Company’s portion of a post-closing working capital adjustment in the amount of $2,286 that was paid to TAC in December 2019.

In July 2021, MSC Mexico acquired additional assets of TAC in conjunction with the acquisition of its outsourcing and logistics businesses. Following this acquisition, the Company retains its 75% interest in MSC Mexico. This acquisition provides the Company with the opportunity to further expand its business throughout North America. The portion of the consideration attributable to the Company was $8,061, which included cash paid of $6,719 and the fair value of contingent consideration to be paid of $1,342. Total cash consideration funded by the Company came from available cash resources of $1,969 and a note payable of $4,750. The fair value of the contingent consideration to be paid out represents the present value of the $2,600 contingent consideration as of the acquisition date based on a probability-weighted fair value measurement. During fiscal year 2022, the Company paid cash of $455 related to the contingent consideration. Based on the probability that the remaining estimated contingent consideration payment would not be achieved, the contingent consideration liability of $879, net of foreign currency translation adjustments, was released.