Shares of ESAB Corporation (NYSE: ESAB) experienced a decline on Monday following the company's announcement of its intent to acquire Eddyfi Technologies, a Canadian-based company, in a deal valued at approximately $1.45 billion. The acquisition represents a significant strategic step for ESAB in expanding its market presence and diversifying its industry exposure.
ESAB plans to fund this acquisition through a combination of existing cash balances, borrowed funds, and a fully committed equity issuance amounting to $318 million. The company anticipates that the transaction will reach completion by the middle of 2026, subject to typical closing conditions and the receipt of necessary regulatory approvals.
Eddyfi’s Financial Outlook and Growth Prospects
Projections from Eddyfi Technologies indicate that by 2026, the company is expected to generate around $270 million in revenue along with an adjusted EBITDA of $80 million. When factoring in anticipated annualized synergies, the adjusted EBITDA could rise to $100 million. Eddyfi anticipates maintaining a high-single-digit organic growth trajectory coupled with gross margins surpassing 65%, underscoring its strong profitability potential.
Integration plans include incorporating Eddyfi into ESAB's operational framework by applying the ESAB Business Excellence System (EBXai). This initiative is projected to unlock $20 million in synergies besides additional operational and commercial advantages accruing from the consolidation of both firms’ capabilities.
Financial Guidance from ESAB
Looking ahead, ESAB has provided forward guidance for its fiscal periods. For the fourth quarter of 2025, ESAB projects revenues in a range of $720 million to $722 million, surpassing the consensus estimate of approximately $707.67 million. The company anticipates core diluted earnings per share (EPS) between $1.34 and $1.36, closely aligned with market expectations at $1.35.
For the full year 2025, ESAB forecasts revenues of $2.842 billion to $2.844 billion, exceeding the consensus estimate near $2.72 billion, while core EPS is expected to settle between $5.25 and $5.27 compared to the market forecast of $5.29. For fiscal year 2026, revenue projections span from $2.850 billion to $2.950 billion with core EPS estimated between $5.70 and $5.90, slightly below the consensus EPS estimate of $5.94.
Executive Perspectives on the Acquisition
Shyam P. Kambeyanda, who serves as ESAB's president and chief executive officer, emphasized the strategic significance of acquiring Eddyfi. He stated that combining Eddyfi's specialized inspection and monitoring technology with ESAB's existing fabrication solutions will establish ESAB as the leading provider of an end-to-end workflow offering. This comprehensive solution is expected to solidify ESAB’s status as a preferred global partner in industries where operational quality, productivity, and continuous uptime are critical.
The acquisition is projected to broaden ESAB’s total addressable market by an estimated $5 billion and to accelerate its aim of evolving into a business model characterized by faster growth, higher profit margins, and reduced cyclicality. Additionally, the merger strengthens ESAB's positioning in attractive, rapidly growing sectors including Aerospace and Defense, Nuclear energy, Civil Infrastructure, and other related markets.
Financial Position as of Late 2025
As of October 3, 2025, ESAB reported cash and cash equivalents totaling $218.2 million. Despite the immediate reaction in the stock market—where ESAB shares fell by 7.84% to $111.57 at the time of the announcement—management remains focused on the long-term benefits of this strategic acquisition.
Key Operational and Market Implications
The integration of Eddyfi into ESAB's portfolio is expected to deliver synergistic efficiencies and operational enhancements through shared expertise and streamlined processes. Utilizing the ESAB Business Excellence System (EBXai), the combined entity anticipates unlocking substantial value and delivering enhanced service offerings to customers who demand high standards of quality and uptime.
Overall, this acquisition represents a calculated move by ESAB to expand into higher-growth markets and diversify its portfolio away from traditional cyclical trends, positioning the company for sustainable future growth while solidifying its leadership in fabrication-related workflows and inspection technologies.