ESE · ESCO Technologies Inc.

ESCO Technologies announced a transformative acquisition of Megger Group Limited, a global provider of test, monitoring, and data analytics solutions for electric power assets, for $2.35 billion. The transaction expands ESCO's scale and international reach, with Megger expected to generate approximately $590 million in 2026 revenue and add complementary test equipment to ESCO's Utility Solution Group segment. The company anticipates approximately $60 million in cost synergies within the first three years post-closing, and the acquisition price represents approximately 14x projected 2026 EBITDA including synergies. Concurrently, ESCO reported preliminary Q2 2026 results showing revenue of $309 million, GAAP EPS of $1.29, and Adjusted EPS of $1.91, which the company stated exceeded prior guidance and reflected strong sales growth and margin improvement. The acquisition continues ESCO's strategic shift toward high-margin, high-growth end markets, with approximately 85% of pro forma revenue positioned to benefit from secular tailwinds in Utility and Aerospace & Defense markets. Management highlighted the strategic fit, with CEO Bryan Sayler calling it a 'major milestone in our strategy to build a scaled, differentiated, high-margin utility solutions platform.' The transaction is subject to regulatory approvals and financing, with TBG receiving equity consideration and board nomination rights as part of the agreement.