Donaldson Co. Inc.

Specialty Industrial Machinery • Industrials • Bloomington, MN, United States • DCI (NYQ)

952 887 3131 1400 West 94th Street, Bloomington, MN 55431, United States

Quarter: Q1 2026 Reported: February 2, 2026 Sentiment: Positive

Donaldson Company, Inc. manufactures and sells filtration systems and replacement parts worldwide. The company operates through Mobile Solutions, Industrial Solutions, and Life Sciences segments. The Mobile Solutions segment provides replacement filters for air and liquid filtration applications, such as air filtration systems, fuel, lube and hydraulic systems, emissions systems and sensors, indicators, and monitoring systems. This segment sells its products to original equipment manufacturers (OEMs) in the construction, mining, agriculture, and transportation markets; and to independent distributors, and OEM dealer networks. The Industrial Solutions segment offers dust, fume, and mist collectors; compressed air and industrial gasses purification systems; air inlet systems and filtration for power generation; ancillary components; replacement parts; performance monitoring and service; and hydraulic and lubricated rotating equipment applications, as well as gas and liquid filtration for industrial processes and connected services. It also sells aerospace and defense products comprising of air, fuel, lubrication and hydraulic filtration for fixed-wing and rotorcraft aerospace applications and ground defense vehicle and naval platforms. This segment sells its products to various distributors, OEMs, and end-users. The Life Sciences segment provides micro-environment gas and liquid filtration for food, beverage, and industrial processes; bioprocessing equipment that includes bioreactors and fermenters; and bioprocessing consumables, such as chromatography devices, reagents and filters, and polytetrafluoroethylene membrane-based products, as well as specialized air and gas filtration systems for applications, including hard disk drives, semi-conductor manufacturing and sensors, battery systems, and powertrain components to OEMs and various end-users. The company was founded in 1915 and is headquartered in Bloomington, Minnesota.

Analysis Summary

Donaldson Company, Inc. (DCI) announced a significant strategic expansion through the acquisition of Facet Group, comprising Facet (Oklahoma) LLC and Facet Netherlands B.V., for $820 million in cash. This transaction, formalized via a Securities Purchase Agreement on January 31, 2026, represents a substantial investment aimed at bolstering DCI's market position and diversifying its portfolio. The acquisition structure involves purchasing all outstanding equity interests of both U.S. and International Facet entities.

**Strategic Initiatives and Business Segment Analysis:** While the 8-K does not detail Facet's specific business segments, the acquisition itself indicates a strategic move to integrate new capabilities or expand into adjacent markets. The all-cash payment underscores DCI's financial strength and commitment to this growth initiative. The company has also secured a customary representations and warranties insurance policy, mitigating certain post-closing risks.

**Management Commentary and Forward Guidance:** The filing primarily focuses on the transaction details. No specific Q1 2026 earnings performance or updated full-year guidance for DCI was provided in this 8-K, as it is not an earnings report. However, the announcement of a major acquisition implicitly signals management's confidence in future growth prospects and their proactive approach to market leadership.

**Competitive Positioning and Market Trends:** This acquisition positions DCI to potentially enhance its competitive edge by expanding its product lines, customer base, or technological capabilities through Facet. The move aligns with a trend of consolidation and strategic growth in industrial filtration and related sectors.

**Risk Factors and Concerns Raised:** The transaction is subject to several customary closing conditions, including regulatory approvals (e.g., Hart-Scott-Rodino Act, foreign direct investment filings), absence of prohibitive laws, and the accuracy of representations and warranties. Key risks highlighted include the ability to obtain required regulatory approvals, the risk of the transaction not closing on the anticipated timeline or at all, challenges in realizing projected benefits, availability of funding sources, and general integration risks. The Purchase Agreement includes termination rights for both parties under specific conditions, such as non-consummation by October 31, 2026, or material breaches.

**Analyst Q&A Highlights:** As this is an 8-K filing, there was no analyst Q&A session. The document serves as a formal disclosure of a material event.

Key Highlights

• Donaldson Company, Inc. (DCI) to acquire Facet Group for $820 million in cash.
• The acquisition includes both U.S. (Facet US) and International (Facet BV) entities.
• Transaction is subject to customary closing conditions, including regulatory approvals (e.g., HSR Act).
• Closing is targeted by October 31, 2026, with potential for a six-month extension.
• DCI secured a representations and warranties insurance policy for the transaction.
• This 8-K filing primarily details the acquisition and does not contain DCI's Q1 2026 operational financial results or guidance.

Financial Metrics

eps

Not reported in this 8-K

revenue

Not reported in this 8-K

guidance

net income

Not reported in this 8-K

acquisition price

820 million

Stock Performance (90 Days)

Data through Feb 13, 2026

Layoff Events

Earnings Calls

Positive Signals

• Strategic acquisition signals confidence in future growth.
• All-cash payment demonstrates strong financial position.
• Use of representations and warranties insurance mitigates transaction risks.
• Clear timeline for closing, with provisions for extension.
• Proactive expansion into new or complementary markets.

Risks & Concerns

— Ability to obtain required regulatory approvals (e.g., HSR, foreign direct investment).
— Risk that the transaction may not close on the anticipated timeline, or at all.
— Challenges in realizing the projected benefits and synergies of the acquisition.
— Availability of funding sources for the transaction (though stated as cash, large transactions can impact liquidity).
— Potential for a material adverse effect on Facet prior to closing.