CAMBRIDGE, ON, April 14, 2021 /CNW/ - ATS Automation
Tooling Systems Inc. (TSX: ATA) ("ATS" or the "Company"), an
industry-leading automation solutions provider, today announced it
has entered into a definitive agreement to acquire BioDot, Inc.
("BioDot"), a leading manufacturer of automated fluid dispensing
systems for US$84 million
(~C$106 million), subject to
customary post-closing adjustments, representing 9.7x BioDot's
FY2022 expected EBITDA or 8.4x post synergies(1). The
transaction is expected to close in the second calendar quarter of
2021, pending the completion of customary regulatory filings. ATS
plans to fund the acquisition by drawing on its revolving credit
facility.
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"The addition of BioDot expands our Life Sciences capabilities
in precise, low volume fluid dispensing and enhances our position
in the point-of-care and clinical diagnostics lab automation
end-markets," said Andrew Hider, CEO
of ATS. "With a long track record, applications expertise and
deep customer relationships, BioDot's systems enable customers to
manufacture billions of test devices annually. Given the transition
toward near-patient and at-home diagnostic testing for a broad
range of infectious diseases including Covid-19, and other medical
and non-medical testing applications, the acquisition of BioDot
will allow us to play a bigger role in supporting the needs of our
Life Sciences customers for the long term."
Founded in 1994 and based in Irvine,
California, BioDot manufactures premium, non-contact and
quantitative fluid dispensing systems serving customers in
point-of-care and clinical diagnostics, and other segments of the
life sciences market. BioDot's proprietary technology and patent
portfolio allow it to meet stringent industry requirements and
address customer needs in R&D, pilot production and rapid,
high-volume production. In FY2020, BioDot generated revenues of
US$36 million and EBITDA of
US$15 million. Approximately 50% of
its revenues is derived from customers in North America, 26% from EMEA, 18% from
China, and the remainder from
other regions. BioDot derives 75% of its sales from point-of-care
diagnostic systems, 9% from life sciences & clinical systems,
and 16% from aftermarket services & consumables. BioDot employs
94 employees spread across its two US manufacturing facilities and
locations in China and the UK.
BioDot will continue to be led by its long tenured CEO,
Tony Lemmo who remarked, "By
leveraging the combined technologies and capabilities of BioDot and
ATS, we will create unique solutions for our global customer
base. Joining ATS will also allow us to ramp up our R&D
efforts and will provide new opportunities for our talented
employees. We look forward to the next chapter of BioDot's growth
within ATS."
Attractive Synergy Opportunity
ATS expects to realize
approximately US$1.5 million in
annual cost synergies within three years of acquisition, including
supply chain savings and operational efficiencies. ATS also expects
revenue synergies to generate approximately US$1.0 million of additional EBITDA within three
years by leveraging the combined ATS and BioDot technologies in
turnkey customer solutions and joint product development. The
transaction is expected to be accretive to ATS' earnings and cash
flow per share metrics in the first year following the acquisition.
ATS expects return on invested capital (ROIC) to exceed its cost of
capital by year three following completion of the
acquisition.
Conference Call and Webcast
ATS will host an analyst
conference call and accompanying webcast to discuss the transaction
at 10:30 a.m. EDT on Wednesday April
14, 2021. 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 April
20, 2021) by dialing (416) 849-0833 and entering passcode
1167436 followed by the number sign.
About BioDot Inc.
Founded in 1994, BioDot manufactures
premium, non-contact and quantitative fluid dispensing systems.
Combined with its expertise in lamination, cutting, and assembly,
its wide range of platforms serve BioDot's customers from R&D
through high volume manufacturing in the industrial, diagnostic,
life science and medical product markets. Based in Irvine, California, BioDot has international
offices to service a variety of industries in every nation. Its
long-lasting relationships with customers are built on precision
products and quality service around the world. Visit the company's
website at https://www.biodot.com for more details.
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, food & beverage, transportation,
consumer products, and energy. Founded in 1978, ATS employs over
5,000 people at 28 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.
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1)
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FY2022 EBITDA is
based on ATS projections and includes ~US$1.2 million in cost
synergies; 8.4x post synergies multiple includes revenue and cost
synergies of ~US$2.5 million; FY2022 represents fiscal year ending
Dec. 31
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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 BioDot 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 BioDot, or developments in either ATS' or BioDot'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: completion of and timing for completion of the
acquisition, funding of the transaction, expectations relating to
BioDot revenue and EBITDA, expectations related to quantum and
timing of cost and revenue synergies, expectations relating to
impact on ATS' earnings and cash flow per share metrics, and return
on invested capital. The risks and uncertainties that may affect
forward-looking statements include, among others: performance of
the market sectors that BioDot and ATS serve; the progression of
COVID-19 and its impacts on the Company's and BioDot'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
BioDot 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 BioDot
conduct business; the impact of the COVID-19 pandemic on the
Company's and BioDot'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; that closing is delayed or prohibited as a
result of the completion of regulatory filing process; that
BioDot's business does not perform as expected, negatively
impacting revenue and EBITDA and/or that expected cost and revenue
synergies are not realized within the expected timeframe or at all;
that earnings and cash flow per share metrics are not accretive in
the first year for any number of reasons, including those stated
above; that return on invested capital targets are not reached
within the expected timeframe or at all; that one or more
customers, or other persons with which BioDot 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 BioDot's
markets; that growth in markets BioDot serves is less than
expected; risks relating to legal proceedings to which BioDot
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.
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.