Company: GGG
Filing Date: 2025-02-18
Form Type: 10-K
Source: 0000042888-25-000011
Chunk: 97

Company: GRACO INC
Filing Date: 2025-02-18
Form: 10-K
Item: Item 8
Chunk 97
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 Company also has commitments with certain suppliers to purchase minimum quantities, and under the terms of certain agreements, the Company is committed for certain portions of the supplier’s inventory. The Company does not purchase, or commit to purchase, quantities in excess of normal usage or amounts that cannot be used within one year. The Company estimates that the maximum commitment amount under such agreements does not exceed $48 million. The Company enters into contracts with vendors to receive services. Commitments under these service contracts with non-cancelable terms of more than one year totaled $15 million in 2025, $11 million in 2026, $8 million in 2027 and $5 million thereafter. 

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In addition, the Company could be obligated to perform under standby letters of credit totaling $6 million at December 27, 2024. The Company has also guaranteed the debt of its subsidiaries for up to $4 million. All debt of subsidiaries is reflected in the consolidated balance sheets.Contingencies. The Company is party to various legal proceedings arising in the normal course of business. The Company is actively pursuing and defending these matters and has recorded an estimate of the probable costs where appropriate. Management does not expect that the resolution of these matters will have a material adverse effect on the Company, although the ultimate outcome cannot be determined based on available information.

L. Acquisitions

On November 4, 2024, the Company acquired Corob S.p.A. ("Corob") for €230 million in cash, subject to normal post-closing purchase price adjustments, with up to €30 million in additional contingent consideration. Corob is a global leader in the design and manufacturing of high-performance volumetric and gravimetric dispense, mixing, and shaking equipment used in mission-critical tinting applications. The acquired business expands and complements the Company’s Contractor segment. Results of Corob's operations, including $16 million of sales and $3 million of operating losses, have been included in the Company’s Contractor segment starting from the date of acquisition. As of December 27, 2024, the purchase price allocation remains preliminary as the Company completes its assessment, principally related to income taxes and the finalization of post-closing purchase price adjustments. The financial results of the Corob acquisition are not expected to have a material impact on the consolidated financial statements.The contingent consideration is related to the sellers' eligibility to receive cash earn out payments, calculated based on qualified revenue performance metrics for two individual twelve-month periods. The earn out payments are capped at