ATS AUTOMATION TO ACQUIRE ATW AUTOMATION BUSINESSES IN USA AND EUROPE
For Immediate Release
Cambridge, Ontario (December 6, 2010) – 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
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
Notes to Readers:
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 forwardlooking 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.
For more information, contact:
Maria Perrella, Chief Financial Officer
Carl Galloway, Vice-President, Treasurer