FCG Acquisitions Inc.

Overview Key strengths Key risks High revenue exposure to relatively stable maintenance, repair, and operations (MRO) demand. Negligible market share in the fragmented and highly competitive industrial distribution industry. Highly engineered product offering commands pricing premium. Persistent high leverage due to acquisition-based growth strategy. Technical knowledge and service capabilities add value to its offerings. Some cyclical end-market exposure despite broad customer diversity. In fiscal 2024 (ending June 30, 2024) FCG reported a 0.2% year-over-year organic revenue decline, pro forma as if all acquisitions completed through the end of fiscal 2024 were completed at the beginning of fiscal 2023. Flat revenue was the result of growth in verticals such as e-commerce and industrial flow control that was offset by softness in

...We forecast modest organic revenue growth in fiscal 2025 following relatively flat pro forma revenue in 2024. In fiscal 2024 (ending June 30, 2024) FCG reported a 0.2% year-over-year organic revenue decline, pro forma as if all acquisitions completed through the end of fiscal 2024 were completed at the beginning of fiscal 2023. Flat revenue was the result of growth in verticals such as e-commerce and industrial flow control that was offset by softness in certain end-markets such as life sciences (continued customer inventory destocking following pandemic-related demand) and automation (soft industry demand as the interest rate environment affected the attractiveness of automation projects). In addition, we believe the company benefited from lower inflation-related price passthroughs as CPI declined. In fiscal 2025, we forecast modestly positive organic growth, despite first quarter revenue (pro forma to...

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