ALTG Alta Equipment Group Inc

Item 8.01. Other Events. *

On November 1, 2022, Alta Equipment Group Inc. (“Alta” or the “Company”) closed its acquisition of Ecoverse Industries, LTD (“Ecoverse”). Ecoverse is a full line distributor of industry-leading environmental processing equipment headquartered in Avon, Ohio, with 15 sub dealers throughout North America. The acquisition was completed pursuant to the agreement announced on October 18, 2022. The purchase price consisted of $42.5 million in cash paid at closing, subject to certain adjustments based upon Ecoverse's net working capital at closing. Additionally, the Company issued 212,400 shares of its common stock in connection with the purchase agreement. Ecoverse generated approximately $64.3 million in revenue, $10.0 million in net income, $10.1 million in Adjusted EBITDA* and $9.7 million of Adjusted pre-tax net income* for the trailing twelve months through July 2022.

*Use of Non-GAAP Financial Measures

We disclose non-GAAP financial measures Adjusted EBITDA and Adjusted pre-tax net income in this filing because we believe they are useful performance measures that assist in an effective evaluation of the acquisition and its expected impact on our operating performance when compared to our peers, without regard to financing methods or capital structure. We believe such measures are useful for investors and others in understanding and evaluating the acquisition and its expected impact on our operating results in the same manner as our management. However, such measures are not financial measures calculated in accordance with GAAP and should not be considered as a substitute for, or in isolation from, net income (loss), revenue, operating profit, or any other operating performance measures calculated in accordance with GAAP.

We define Adjusted EBITDA as net income (loss) before interest expense (not including floorplan interest paid on new equipment), income taxes, depreciation and amortization, adjustments for certain one-time or non-recurring items and other adjustments. We exclude these items from net income (loss) in arriving at Adjusted EBITDA because these amounts are either non-recurring or can vary substantially within the industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted pre-tax net income is defined as net income (loss) before income taxes adjusted to reflect certain one-time or non-recurring items and other adjustments. Certain items excluded from Adjusted EBITDA and Adjusted pre-tax net income are significant components in understanding and assessing a company’s financial performance. For example, items such as a company’s cost of capital and tax structure as well as certain one-time or non-recurring items, are not reflected in Adjusted EBITDA or Adjusted pre-tax net income. Our presentation of Adjusted EBITDA, EBITA and Adjusted pre-tax net income should not be construed as an indication that results will be unaffected by the items excluded from these metrics. Our computation of Adjusted EBITDA, and other non-GAAP measures, may not be identical to other similarly titled measures of other companies. Ecoverse’s financial information has not been audited by Alta or its auditors and is subject to change. For a reconciliation of non-GAAP measures to their most comparable measures under GAAP, please see the table entitled “Reconciliation of Non-GAAP Financial Measures” below.