TTM Technologies to Buy Epiq for $1.1 Billion, Taking Net Leverage to 2.3x

TTM Technologies has agreed to acquire Epiq Solutions for about $1.1 billion in cash, a deal that would deepen its exposure to defense electronics but also materially increase leverage. TTM expects the acquisition to close in the fourth quarter of 2026, subject to regulatory approvals and other customary conditions.

The price is the key financial question. TTM is valuing Epiq at an estimated 17.4 times expected 2027 adjusted EBITDA after assumed run-rate synergies, and the company is financing the acquisition with a new $1.1 billion debt commitment. Net leverage is expected to rise to about 2.3 times at closing from 0.9 times reported for the second quarter.

TTM said in its deal announcement that Epiq supplies open-architecture software-defined radios, RF products and radiation-tolerant space computing systems used in signals intelligence, electronic warfare and other defense applications. Epiq, founded in 2009 and based in Rolling Meadows, Illinois, is a portfolio company of Veritas Capital.

The 17.4x valuation depends on 2027 earnings and synergies

TTM's stated acquisition multiple is 17.4 times expected adjusted EBITDA for 2027, but that figure already assumes $9 million of run-rate EBITDA synergies. The headline multiple is therefore a forward-looking, synergy-adjusted measure rather than a valuation based solely on Epiq's current standalone earnings.

The distinction matters because the company has not disclosed a GAAP bridge for Epiq's expected 2027 adjusted EBITDA. TTM said it cannot predict certain reconciling items with reasonable certainty or without unreasonable effort, and warned that those items could have a material effect on a comparable GAAP measure. The 17.4x figure therefore gives investors a useful benchmark for the purchase price, but it should not be read as a simple multiple of audited current earnings.

The deal also requires Epiq to deliver on a future earnings base that TTM expects to be high margin and long cycle. The company says the acquisition should immediately improve TTM's adjusted EBITDA margin, which suggests Epiq's profitability is expected to exceed TTM's existing margin profile. TTM reported a 16.6% adjusted EBITDA margin in the second quarter of 2026, up from 15.0% a year earlier.

That margin improvement is one reason management is willing to pay a high-teens forward EBITDA multiple. The strategic case is that Epiq adds higher-value integrated electronics and RF capabilities in defense markets where TTM already has customer relationships and manufacturing exposure. Still, the valuation is tied to assumptions about 2027 earnings, integration and the $9 million synergy target rather than only to results that have already been realized.

New term loans would push net leverage to 2.3x

The financing structure makes the acquisition more consequential for TTM’s balance sheet than the all-cash label alone suggests. In an 8-K filed with the Securities and Exchange Commission, TTM disclosed commitments for a $300 million senior secured term loan A facility and an $800 million seven-year senior secured term loan B facility. Proceeds may be used for the purchase price, transaction costs and refinancing certain Epiq debt.

Those commitments are large relative to TTM's current debt load. At June 29, TTM had about $973.5 million of outstanding debt, net of discount and issuance costs, and $507.9 million of cash and cash equivalents. The new $1.1 billion debt package is therefore larger than TTM's entire reported outstanding debt balance at the end of the second quarter, although the final capital structure will depend on how much of the facilities is drawn, any cash funding and the refinancing of Epiq obligations.

TTM entered the deal from a relatively moderate leverage position. Management said second-quarter net leverage was 0.9 times. At the acquisition close, it estimates total net leverage will rise to 2.3 times, then fall to between 1.5 and 1.7 times within 12 to 18 months.

That deleveraging target depends on the combined business generating the EBITDA and cash conversion TTM currently forecasts. The investor presentation describes Epiq's expected EBITDA generation and cash flow conversion as the path to bringing leverage back down. TTM generated $96.4 million of operating cash flow in the second quarter and expects 2026 capital expenditures of $345 million to $365 million, so acquisition debt will sit alongside an already substantial investment program.

The debt itself carries floating-rate exposure. The commitment letter provides for the term loan A to initially price at Term SOFR plus 1.75 percentage points and the term loan B at Term SOFR plus 2.00 percentage points, subject to the final financing process and other terms. That means the eventual interest burden will depend partly on benchmark rates and final syndication terms, another reason the leverage trajectory matters after closing.

EBITDA margin accretion comes before EPS accretion

TTM is drawing an important distinction between margin accretion and earnings-per-share accretion. Management expects Epiq to be immediately accretive to adjusted EBITDA margin, but it does not expect the acquisition to become accretive to non-GAAP diluted EPS until during 2028.

That timing gap is more informative than a generic claim that the deal is "accretive." TTM's public materials do not provide a detailed bridge from immediate adjusted EBITDA margin accretion to 2028 non-GAAP EPS accretion, so the reason for the lag cannot be pinned on any single factor from the disclosed documents.

The 2028 EPS target is also a forecast, not a guaranteed outcome. TTM's own release identifies financing conditions, regulatory approvals, integration execution, economic conditions and demand as risks that could cause actual results to differ from its projections. The company is buying a business that management expects to strengthen its financial mix, but it is also accepting a higher leverage profile and paying a valuation that depends on future adjusted EBITDA and synergies.

The acquisition has been unanimously approved by TTM's board. Closing is subject to expiration or termination of the applicable Hart-Scott-Rodino waiting period and other customary conditions. The purchase agreement can generally be terminated if the deal has not closed by Nov. 15, 2026, with an automatic extension to May 15, 2027 in certain circumstances. TTM would owe a $77 million termination fee if specified required regulatory approvals are not obtained under certain termination scenarios.

For investors, the next test is not whether Epiq broadens TTM's defense technology portfolio, which management has already made clear. It is whether the acquired earnings can justify a 17.4x synergy-adjusted forward multiple while cash generation brings leverage back toward TTM's 1.5 to 1.7 times target. TTM expects the deal to close in the fourth quarter, making financing terms and regulatory clearance the next concrete milestones.