ESCO Technologies Closes $2.3 Billion Megger Deal, Adding 5.1 Million Shares To Swiss Seller

ESCO Technologies completed its purchase of Megger Group Limited on Thursday in a roughly $2.3 billion cash-and-stock transaction, handing Swiss seller TBG AG $922 million in cash and 5.10 million shares of ESCO common stock. The deal, first announced in April, folds Megger — a global provider of testing and monitoring solutions for electric utilities — into ESCO's Utility Solutions Group segment.

What The 8-K Says

The closing occurred Thursday, October 1, according to an 8-K filed Friday with the SEC. Total consideration to TBG AG came to approximately $2.3 billion, split between $922 million in cash and 5.10 million shares of ESCO common stock. The purchase price remains subject to a post-closing cash adjustment tied to Megger's net debt and working capital at closing.

The purchase agreement with TBG AG was signed April 15, 2026, and ESCO filed the original deal announcement the following day. Megger is incorporated in England and Wales and will be folded into ESCO's Utility Solutions Group segment.

ESE shares were flat at $274.95 in Friday after-hours trading, as the filing was disclosed after the close.

The Debt Stack Behind The Deal

To fund the cash portion, ESCO drew about $1.0 billion on Thursday across three new senior secured credit facilities arranged under a credit agreement signed May 29, 2026, with JPMorgan Chase Bank as administrative agent and Bank of America as syndication agent.

The three facilities carry a combined capacity of $1.5 billion: a $500 million revolving line, a $500 million Term Loan A maturing October 1, 2031, and a $500 million Term Loan B maturing October 1, 2033. The proceeds covered the cash purchase price, the refinancing of existing debt at both ESCO and Megger, and transaction fees and expenses.

The new facilities replaced ESCO's prior credit agreement, which had been scheduled to mature August 30, 2028, and which terminated on Thursday when the new agreement became effective. The facilities are secured by a first-priority interest in substantially all tangible and intangible personal property of ESCO and its guarantor subsidiaries, and carry standard financial covenants including a leverage ratio and an interest coverage ratio. ESCO also has an expansion option that could add up to the greater of $451 million or 100% of consolidated adjusted earnings before interest, taxes, depreciation, and amortization, plus additional amounts subject to leverage conditions.

TBG's Seat At The Table — And Its Limits

As part of the closing, ESCO and TBG entered into a shareholder agreement Thursday that governs what TBG can do with its 5.10 million consideration shares and how much influence it retains as a holder.

The key terms, per the SEC filing: TBG has the right to nominate one board seat for as long as it holds at least 50% of its consideration shares. Its total ESCO ownership is capped at 24.5% of outstanding common stock without board consent. The shares are locked up for 12 months from closing, with half released after six months, subject to specified exceptions.

The agreement also gives TBG consent rights over fundamental changes to ESCO's business and bylaw amendments that would disproportionately harm TBG's rights — but only during the 12-month restricted period and only while TBG clears the 50% ownership threshold. TBG also receives customary registration rights and preemptive rights.

To fill the board seat, ESCO's board expanded from eight to nine members on Thursday by unanimous written consent and elected Jeremy P. Abson as an independent director. Abson was designated a Class III director, with a term running through the 2029 annual meeting, and will be compensated on the same basis as ESCO's other non-employee directors.

What To Watch Next

ESCO said it will release fiscal year 2027 financial guidance incorporating Megger's contribution in November, when it reports fourth-quarter 2026 earnings — the first look investors will get at how the combined company is expected to perform.

Separately, ESCO must file an amended 8-K containing Megger's audited financial statements and pro forma combined financial data within 71 calendar days of the October 2 filing date.

Fiscal year 2027 guidance that reflects Megger's full impact is due in November alongside ESCO's fourth-quarter 2026 earnings report.

Sources

• 8-K Filing — ESCO TECHNOLOGIES INC (ESE) — SEC EDGAR
• ESCO Completes Acquisition of Megger Group Limited — globenewswire.com