Mr. Adrian Thomas reports

HAMMOND POWER SOLUTIONS INC. TO ACQUIRE AEG POWER SOLUTIONS

Hammond Power Solutions Inc. has signed a definitive agreement to acquire AEG Power Solutions, subject to regulatory approvals and customary closing conditions.

AEG Power Solutions is a leading global manufacturer of mission-critical industrial power electronics serving a diverse set of markets, including industrial facilities, transportation, infrastructure and energy applications. Operating primarily across Europe and Asia, AEG Power Solutions employs more than 780 professionals and operates five manufacturing facilities worldwide, with approximately $326-million in revenue in 2025.

Strategic rationale

Once complete, the proposed acquisition is expected to strengthen Hammond's portfolio, market reach and long-term growth profile through:

• Product expansion -- integrated electrical solutions combining Hammond's transformer and power magnetics strengths with AEG Power Solutions' industrial UPS and power conversion expertise;
• End market expansion -- increased exposure to high-growth markets including industrials, infrastructure and energy transition applications;
• Geographic expansion -- superior scale and global platform, supporting long-term diversified growth across multiple regions;
• Customer base expansion -- large installed base and global aftermarket services, increasing recurring revenue from service, maintenance and upgrades.

"This transaction is an important strategic milestone for Hammond Power Solutions," said Adrian Thomas, chief executive officer of Hammond. "It strengthens our technology foundation, expands our capabilities in power electronics and integrated electrical solutions, and extends our reach across key markets. Just as importantly, it brings together two teams grounded in strong values and culture. This transaction reflects the same principles that have guided our long-term capital allocation: strategic relevance, financial discipline and risk awareness, while maintaining a prudent leverage profile and a clear path to long-term value creation."

"The combination of HPS and AEG Power Solutions will allow our teams to collaborate more closely, extend our global reach and continue supporting customers with the same focus on reliability and service that they value and depend on," said Franck Audrain, chief executive officer of AEG Power Solutions.

"In 2026, Hammond Power Solutions marks 25 years as a publicly traded company," said Bill Hammond, chairman of Hammond. "I can think of no better way to celebrate that legacy than by taking a meaningful strategic step that builds on what we have created together. This deal to acquire AEG Power Solutions reflects the strength of our foundation and positions HPS for the next phase of long-term growth."

Transaction details

Under the terms of the agreement, Hammond will acquire all outstanding equity of AEG Power Solutions in an all-cash transaction with an enterprise value of $365-million. As part of the transaction, Hammond will repay AEG Power Solutions' outstanding bank debt. The transaction is expected to be accretive to adjusted earnings per share in the first full year following closing, with anticipated returns on invested capital exceeding Hammond's cost of capital.

"This transaction reflects a disciplined approach to growth. We expect it to enhance our earnings and cash flow profile while maintaining long-term balance sheet flexibility, supporting a clear path to deleveraging and continued investment in our business," said Richard Vollering, chief financial officer of Hammond.

The transaction is subject to regulatory approvals and other customary conditions, and is expected to close in the second quarter of 2026. Hammond intends to finance the transaction through a new committed syndicated debt arrangement, consisting of a term loan and a revolving debt facility.

Upon completion, AEG Power Solutions will operate as a wholly owned subsidiary of Hammond, with its leadership team expected to continue overseeing day-to-day operations.

J.P. Morgan acted as exclusive financial adviser to Hammond in connection with this transaction.

Conference call and webcast information

Hammond will hold a conference call and webcast on Tuesday, Feb. 17, 2026, at 9 a.m. Eastern Time. This call can be accessed by registration.

Date/time:  Feb. 17, 2026, at 9 a.m. ET

An audio-only webcast will be available.

A webcast replay will be available for 12 months.

About Hammond Power Solutions Inc.

Hammond enables electrification through its broad range of dry-type transformers, power quality products and related magnetics. Hammond' standard and custom-designed products are essential and ubiquitous in electrical distribution networks through an extensive range of end-user applications. The company has manufacturing plants in Canada, the United States, Mexico and India, and sells its products around the globe. Hammond shares are listed on the Toronto Stock Exchange and trade under the symbol HPS.A.

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