Ultra Clean Holdings, Inc.

2. BUSINESS COMBINATIONS

On October 25, 2023, the Company acquired 100% of the shares of HIS Innovations Group (“HIS”), a privately held company based in Hillsboro, Oregon. HIS is a leading supplier to the semiconductor sub-fab segment including the design, manufacturing, and integration of components, process solutions, and fully integrated sub-systems. The acquisition strengthened the Company's leadership in developing and supplying critical products to the semiconductor industry, and extended its reach into the sub-fab area.

The purchase price of HIS for purposes of the Company’s purchase price allocation was determined to be $73.6 million, which includes initial cash consideration of $46.5 million and the fair value of potential earn-out payments of approximately $27.1 million. These potential earn-out payments represent up to $70.0 million of cash consideration that may be payable based on the financial performance of the acquired business during the fiscal years 2023, 2024, and 2025. The fair value of the potential earn-out payments was determined utilizing a Monte Carlo simulation model. As of December 26, 2025, the estimated fair value of the earn-out payments was zero. See Note 4 of Notes to the Consolidated Financial Statements for further discussion.

The results of operations for the Company for the fiscal year ended December 29, 2023 included operating activities for HIS since its acquisition date of October 25, 2023. The acquisition-related costs of $1.0 million and $4.7 million were included in the results of operations for the fiscal year ended December 27, 2024 and December 29, 2023, respectively. Acquisition costs are included in general and administrative expenses in the Company’s consolidated results of operations.