CAMBRIDGE, ON, Dec. 7, 2020 /CNW/ - ATS Automation Tooling
Systems Inc. (TSX: ATA) ("ATS" or the "Company"), an
industry-leading automation solutions provider, today announced its
intention to acquire, by way of a voluntary public tender offer,
CFT S.p.A. (BIT: CFT) ("CFT"), an established global supplier to
the food and beverage equipment market. The tender offer of €4.60
per share represents a total equity value of €88 million and a
total enterprise value of €166 million (~C$260 million).
"This is a highly strategic transaction that will allow us to
establish a broader growth platform for ATS in the regulated food
and beverage equipment market, and positions us well in attractive
niches," said Andrew Hider, CEO of
ATS. "With a 75-year track record, proven technology and a
dedicated workforce of 900-plus employees, CFT enables us to
capture more of the value chain in a vertical we covet for its
stability and growth, and complements our recent MARCO acquisition.
CFT also offers significant value creation potential for ATS
shareholders as we work with the CFT team to apply the ATS Business
Model to achieve cost and revenue synergies."
"As an industry leader in automation with a long track record of
innovating for customers, ATS is ideally suited to take CFT to the
next level in our markets," said Roberto
Catelli, Representative of the Major Shareholders of CFT.
"The major shareholders are very pleased to support this
transaction as it will create both opportunity and value for CFT,
our customers and employees in the years ahead."
Established in 1945 and headquartered in Parma, Italy, CFT serves a global customer base
through its portfolio of market-leading brands and eight facilities
in Italy, Spain, Germany and Ukraine. With 140 patents, the company is a
technology leader in the attractive fresh produce sorting,
processing, and packaging niches. In 2019, CFT generated revenue of
€254 million and EBITDA of €17.5 million. Approximately 40% of its
revenue comes from Europe, 23%
from North America and the
remainder from other regions. CFT derives 30% of its sales from
single machines, 50% from complete systems, and 20% from
aftermarket parts & services. The ordinary shares of CFT are
currently listed on the AIM Italia stock exchange.
Significant Synergy Opportunity
ATS expects to achieve
approximately €7 million in annual cost synergies within three
years of closing, including elimination of CFT's public company
costs, supply chain savings, and cost structure optimization. ATS
also expects revenue synergies to generate approximately €7 million
of EBITDA within three years from joint product development,
cross-selling of complementary customer solutions and aftermarket
initiatives. The transaction is expected to be accretive to ATS'
earnings and cash flow per share in the first year following the
acquisition. ATS is targeting a double-digit return on invested
capital (ROIC) by the third year following completion of the
acquisition.
Key Offer Terms and Structure
The tender offer is
being launched by ATS Automation Holdings Italy S.r.l., a limited
liability company indirectly and wholly controlled by ATS, to
acquire 100% of CFT's outstanding shares and voting rights. The
offer price has been set at €4.60 per share in cash, representing a
total enterprise value of €166 million and a premium equal to 86%
over the official price of CFT's ordinary shares as of December 4, 2020 (the trading day prior to the
announcement of the offer).
The tender period under offer will commence if and when approval
is obtained from the applicable Italian regulatory authority.
It is expected that such approval could be granted in January 2021. Once approved, the tender period
will remain open for a period of time determined in consultation
with the Italian stock exchange, expected to be between 15 and 40
trading days. On this basis, it is estimated that the transaction
could close in the first calendar quarter of 2021.
The voluntary tender offer is subject to various closing
conditions, including that: (i) ATS be in a position to acquire at
least 90% of outstanding ordinary share capital by the end of the
offer period in order to effect the delisting of CFT's ordinary
shares from the AIM Italia, (ii) specified changes to the by-laws
of CFT are approved by its shareholders, (iii) certain lock-up
arrangements are waived, and (iv) customary regulatory approvals
are received, including clearance by the German anti-trust
authority and approval from the Spanish Foreign Investment
Authority. In the event that less than 90% of the outstanding
ordinary shares of CFT are submitted to the tender offer, ATS may
elect to close on such lesser amount and pursue other methods for
effecting the delisting. In addition, if less than 100% of the
outstanding shares of CFT are submitted pursuant to the tender
offer, ATS will retain minority shareholder interests in CFT should
it proceed to complete the tender offer.
ATS will finance the tender offer through a combination of cash
on hand and drawing down on its revolving credit facility.
Following completion of the tender offer, CFT will continue to
operate through its established operational facilities and
headquarters that ATS intends to maintain in Italy.
Tender Offer Supported by Major Shareholders
ATS has
entered into an agreement with certain major shareholders of CFT,
currently representing 38.5% of CFT's outstanding ordinary
share capital and 60.6% of related voting rights, wherein such
shareholders have agreed to irrevocably submit their shares to the
tender offer.
Advisors
UniCredit S.p.A. is acting as lead financial
advisor to ATS on this transaction. TD Securities is also acting as
financial advisor to ATS. Clifford
Chance is acting as legal counsel to ATS.
Conference Call and Webcast
ATS will host an analyst
conference call and accompanying webcast to discuss the transaction
at 8:30 a.m. Eastern on Monday December 7, 2020. The
presentation and webcast can be accessed live at
www.atsautomation.com. To participate in the conference call,
please dial (647) 427-7450 five minutes prior. A replay of the
conference will be available on the ATS website following the call.
Alternatively, a telephone recording of the call will be available
for one week (until midnight December 14,
2020) by dialing (416) 849-0833 and entering passcode
8485216 followed by the number sign.
About ATS
ATS is an industry-leading automation
solutions provider to many of the world's most successful
companies. ATS uses its extensive knowledge base and global
capabilities in custom automation, repeat automation, automation
products and value-added services, including pre-automation and
after-sales services, to address the sophisticated manufacturing
automation systems and service needs of multinational customers in
markets such as life sciences, chemicals, consumer products,
electronics, food, beverage, transportation, energy, and oil and
gas. Founded in 1978, ATS employs approximately 4,200 people at 20
manufacturing facilities and over 50 offices in North America, 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.
About CFT S.p.A.
CFT S.p.A. is the operational holding
company of the CFT Group, active in Italy and abroad in the design, development
and production of turn-key machines and systems for the food and
beverage sector. The company was founded in 1945, and is
headquartered in Parma, Italy. CFT
supports its global customer base through market leading brands,
eight facilities and over 900 employees. The company's shares are
traded on the AIM Italia stock exchange under the symbol CFT. Visit
the Company's website at https://www.cft-group.com for more
details.
Note to Readers: Non-IFRS measures:
This news release
uses the non-IFRS measures EBITDA, and return on invested capital
associated with this investment. These terms do not have any
standardized meanings prescribed within IFRS and therefore may not
be comparable to similar measures presented by other companies.
These measures should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
IFRS. EBITDA is defined as earnings from operations excluding
depreciation and amortization (which includes amortization of
intangible assets). EBITDA is used by the Company to evaluate the
performance of operations. Management believes that EBITDA is an
important indicator of ability to generate operating cash flows to
fund continued investment in operations. Management believes that
ATS shareholders and potential investors in ATS use these non-IFRS
financial measures in making investment decisions and measuring
operational results. Return on invested capital associated with
this investment, as used herein, means in respect of any fiscal
year, the net income of CFT in such fiscal year, divided by the
purchase price for the acquisition. Return on invested capital, as
used herein, is used by ATS to evaluate the efficiency of the
allocation of ATS' capital.
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 CFT, or
developments in either ATS' or CFT's business or in their 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 in this press release relate to,
among other things: statements with respect to completion of and
timing for completion of the tender offer, statements with respect
to the anticipated benefits and costs of the proposed acquisition
of CFT, including the growth of the market CFT serves and CFT's
positioning to meet demand, expectations relating to CFT revenue
and EBITDA margin, expectations relating to ATS' return on invested
capital and synergies associated with the proposed acquisition of
CFT; and expectations regarding ATS support for CFT, integration
and deployment of the ATS Business Model. The risks and
uncertainties that may affect forward-looking statements include,
among others: performance of the market sectors that CFT and ATS
serve; the progression of COVID-19 and its impacts on the Company's
and CFT's ability to operate their respective assets, including the
possible shut-down of facilities due to COVID-19 outbreaks; the
severity and duration of the COVID-19 pandemic in all jurisdictions
where the Company and CFT conduct business; the nature and extent
of government imposed restrictions on travel and business
activities and the nature, extent, and applicability of government
assistance programs, in both cases related to the COVID-19
pandemic, as applicable in all jurisdictions where the Company and
CFT conduct business; the impact of the COVID-19 pandemic on the
Company's and CFT's employees, customers, and suppliers; the impact
of COVID-19 on the global economy; general market performance
including capital market conditions and availability and cost of
credit; foreign currency and exchange risk; the relative strength
of the Canadian dollar; impact of factors such as increased pricing
pressure and possible margin compression; the regulatory and tax
environment; failure or delays associated with new customer
programs; integration and the deployment of the ATS Business Model
are not completed as quickly or effectively as planned or expected
and, as a result, anticipated benefits, enhancements and synergies
are not realized; that CFT's business does not perform as expected,
negatively impacting revenue and EBITDA margin and return on
invested capital; that one or more customers, or other persons with
which CFT has contracted, experience insolvency or bankruptcy with
resulting delays, costs or losses; political, labour or supplier
disruptions; imposition of new duties, tariffs or other legal
barriers that impact CFT's markets; that growth in markets CFT
serves is less than expected; risks relating to legal proceedings
to which CFT and/or ATS is or may become a party; exposure to
product liability claims; risks associated with greater than
anticipated tax liabilities or expenses; and other risks detailed
from time to time in ATS' filings with Canadian provincial
securities regulators.
There can be no assurance that the proposed acquisition of CFT
will occur or that the anticipated benefits and effects of the
transaction will be realized. The tender offer is subject to
various approvals and the fulfillment of certain conditions and
there can be no assurance that any such approvals will be obtained
and/or any such conditions will be met. The tender offer could be
modified, restructured or terminated.
The forward-looking statements in this document are, unless
otherwise indicated, stated as of the date hereof and are presented
for the purpose of assisting investors and others in understanding
the proposed acquisition, our future operations if the tender offer
is completed, our financial position and results of operations as
well as our objectives and strategic priorities, and may not be
appropriate for other purposes. Forward-looking statements are
based on management's current plans, estimates, projections,
beliefs and opinions, and other than as required by applicable
securities laws, ATS does not undertake any obligation to update
forward-looking statements should assumptions related to these
plans, estimates, projections, beliefs and opinions change.
SOURCE ATS Automation Tooling Systems Inc.