ATS AUTOMATION TO ACQUIRE ATW AUTOMATION BUSINESSES IN USA AND EUROPE
December 06 2010 - 9:19PM
PR Newswire (Canada)
CAMBRIDGE, ON, Dec. 6 /CNW/ -- TSX: ATA CAMBRIDGE, ON, Dec. 6 /CNW/
- ATS Automation Tooling Systems Inc. ("ATS" or the "Company")
today announced that one of its subsidiaries has entered into a
definitive agreement to acquire the majority of Assembly & Test
Worldwide, Inc.'s U.S.-based and German automation and test systems
businesses (collectively "ATW"). Under the agreement, ATS
subsidiaries will acquire operations in Dayton Ohio, Saginaw
Michigan, Livonia Michigan and Neuwied Germany. The operations have
capability in a number of specialized automation and test system
applications and will complement and add to existing ATS Automation
Systems Group ("ASG") capabilities. Together, the operations
derive approximately two-thirds of their revenues from the
automotive market, with the balance generated primarily in Life
Sciences and Energy. "The acquisition of the ATW businesses will
add to our competency base and provide new relationships with a
number of attractive automotive customers," said Anthony Caputo,
ATS Chief Executive Officer. "As with the formation of our
Life Sciences group earlier this year, this acquisition provides
the critical mass to launch a group focused on transportation. We
expect to launch additional groups as we grow and achieve scale in
other customer markets." The operations to be acquired have a
combined workforce of approximately 300 including 60 in
Germany. In calendar 2009, the operations had combined
revenues of approximately US $65 million and had a mid-single digit
EBITDA margin. Geographically, more than 80% of revenues are
derived from US-based customers. The final purchase price is
expected to be approximately US $18.5 million (approximately CDN
$18.6 million at current exchange rates). At closing, ATS
subsidiaries will purchase certain assets and liabilities of the US
operations and the shares of the German operation. Overall, net
debt of approximately CDN $1 million will be assumed. ATS
expects to complete the acquisition in the next several weeks,
subject to several closing conditions, including customary consents
and approvals and favourable introductory visits with targeted
customers. The acquisition is expected to be accretive to EBIT and
cash flow. The acquisition of the ATW businesses aligns with ATS's
stated strategy of expanding its position in the global automation
market and enhancing growth opportunities. The acquisition will be
funded with cash on hand, making effective use of ATS's strong cash
position. ATS will target margin improvements at the operations to
be acquired through integration of the businesses within its
Transportation group, and the application of ATS best practices in
command and control, program management, performance management and
approach to market. About ATS ATS Automation provides innovative,
custom designed, built and installed manufacturing solutions to
many of the world's most successful companies. Founded in 1978, ATS
uses its industry-leading knowledge and global capabilities to
serve the sophisticated automation systems' needs of multinational
customers in industries such as life sciences,
computer/electronics, energy, automotive and consumer products. It
also leverages its many years of experience and skills to fulfill
the specialized automation product manufacturing requirements of
customers. Through Photowatt, ATS participates in the growing solar
energy industry. ATS employs approximately 2,700 people at 17
manufacturing facilities in Canada, the United States, Europe,
Southeast Asia and China. The Company's shares are traded on the
Toronto Stock Exchange under the symbol ATA. Visit the Company's
website at www.atsautomation.com. Notes to Readers: Forward-Looking
Statements This news release contains certain statements that
constitute forward-looking information within the meaning of
applicable securities laws ("forward-looking statements").
Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results,
performance or achievements of ATS, or developments in ATS's
business or in its industry, to differ materially from the
anticipated results, performance, achievements or developments
expressed or implied by such forward-looking statements.
Forward-looking statements include all disclosure regarding
possible events, conditions or results of operations that is based
on assumptions about future economic conditions and courses of
action. Forward-looking statements may also include, without
limitation, any statement relating to future events, conditions or
circumstances. ATS cautions you not to place undue reliance upon
any such forward-looking statements, which speak only as of the
date they are made. Forward-looking statements relate to,
among other things: expectation of launching additional groups;
expected purchase price; expected closing of the transaction and
timing thereof; expected accretive nature of the transaction;
funding of the transaction; and ATS's program to target margin
improvements. The risks and uncertainties that may affect
forward-looking statements include, among others: inability to
close the acquisition, or delays in closing it, resulting from
failure or delays in relation to satisfying conditions of closing,
including conditions requiring the obtaining of third party
approvals and consents; inability to identify and close further
acquisitions; impact of the purchase price adjustment mechanisms
and the composition of working capital as of closing; failure to,
or delays in, effectively implementing margin improvements due to
management or resource constraints or unforeseen circumstances;
issues arising in relation to the integration of two separate
businesses; receptivity of customers, suppliers, employees, and
market to the transaction; general market performance including
capital market conditions and availability and cost of credit;
economic market conditions; impact of factors such as increased
pricing pressure and possible margin compression; foreign currency
and exchange risk; the relative strength of the Canadian dollar and
the Euro and the U.S. dollar; performance of the market sectors
that ATS serves; that one or more customers experience bankruptcy
despite focus on credit terms; that continuing consolidation and
restructuring efforts take longer than expected and/or incur
greater costs than expected; that continuing strategic initiatives
will not have the intended impact on ASG operations; the
development of superior or alternative technologies to those
developed by ATS; the success of competitors with greater capital
and resources in exploiting their technology; risks relating to
legal proceedings to which ATS is or may becomes a party; risks
associated with greater than anticipated tax liabilities or
expenses; and other risks detailed from time to time in ATS's
filings with Canadian provincial securities regulators.
Forward-looking statements are based on management's current plans,
estimates, projections, beliefs and opinions, and ATS does not
undertake any obligation to update forward-looking statements
should assumptions related to these plans, estimates, projections,
beliefs and opinions change. EBIT and EBITDA EBIT and EBITDA margin
do not have any standardized meaning prescribed within Canadian
generally accepted accounting principles ("GAAP"). See our
most recently filed MD&A for a discussion of the non-GAAP
financial measures used by the company and how they relate to
certain GAAP measures. To view this news release in HTML
formatting, please use the following URL:
http://www.newswire.ca/en/releases/archive/December2010/06/c3061.html
pMaria Perrella, Chief Financial Officerbr/ Carl Galloway,
Vice-President, Treasurerbr/ 519 653-6500/p
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