CAMBRIDGE, ON, Sept. 1, 2013 /CNW/ - ATS Automation Tooling Systems Inc.
(TSX:ATA) ("ATS" or the "Company") today announced that it has entered into a
definitive agreement to acquire all shares of IWK Verpackungstecknik
GmbH as well as OYSTAR IWK USA, Inc. ("IWK"), a leader in technology
driven high performance tube filling and cartoning machinery for the
pharmaceutical and personal care industries.
The acquisition of IWK aligns with ATS's stated strategy of scaling its
leading position in the global automation market and enhancing growth
opportunities, particularly in strategic customer segments and with
technology leadership. IWK is expected to add core capability in
primary packaging (tube fillers) and secondary packaging (cartoners),
which management expects can be leveraged into other markets ATS
currently serves. IWK brings new relationships with key pharmaceutical
and personal care customers, which management expects will improve
ATS's position in the Life Sciences and Consumer Products sectors. IWK
also allows ATS to consider future acquisition possibilities that would
be a strategic fit with IWK to provide the Company with deep
capabilities across several core elements of the customer value chain.
"We welcome the addition of IWK's highly skilled people, customers,
complementary technologies, scale and worldwide presence to our world
leading automation business," said Anthony Caputo, ATS Chief Executive
Officer. "This acquisition significantly enhances our capability, and
deepens our involvement with two attractive customer segments,
pharmaceuticals and consumer products."
Headquartered in Germany, and established 120 years ago, IWK engineers,
assembles and markets primary packaging and secondary packaging
machinery and provides services, for blue-chip companies and local
customers around the world. As part of ATS, IWK will continue to
enhance its portfolio and serve customers under its own brand.
IWK's approximately 420 employees are based at production facilities
near Karlsruhe, Germany and Bangkok, Thailand, and at sales/services
centres in the US, Europe and Southeast Asia.
In calendar 2012, IWK had revenues of approximately €82 million and
Earnings Before Interest, Taxes, Depreciation and Amortization
("EBITDA") of approximately €11 million. Sales to customers in the
pharmaceuticals and personal care sectors evenly account for over 90%
of IWK worldwide revenues. New equipment systems and standard
automation each account for approximately 30% of total revenues, with
services activity accounting for the remaining 40% of total revenues.
European and North American markets each account for approximately a
third of revenues, Asia 25%, and the balance largely represented by
South America.
The purchase price is approximately €103 million (CDN $144 million at
current exchange rates), subject to net debt and working capital
adjustments which is expected to result in net cash paid of
approximately €95 million, funded substantially from the Company's cash
on hand. For its first full year within ATS, IWK is expected to
contribute approximately $120 million in revenues and approximately $18
million in EBITDA. The Company expects approximately 50% of the
purchase price will be allocated to goodwill. ATS expects to complete
the acquisition in the third quarter of fiscal 2014, subject to
customary closing conditions, including applicable antitrust approvals.
The acquisition is expected to be immediately accretive to Earnings Per
Share (EPS) and Cash Flow Per Share (CFPS). Based on current financial
results and near term expectations, the Company expects the transaction
to contribute approximately 7 cents per share to EPS and approximately
19 cents per share to CFPS for FY2015.
Conference Call and Webcast
At 11:00 a.m. eastern Tuesday September 3, 2013, the Company will host a
webcast with accompanying slides and an analyst conference call with
follow-up question and answer period to discuss the transaction.
The listen-only webcast can be accessed live at www.atsautomation.com. The conference call can be accessed live by dialing 416-644-3414 five
minutes prior.
A replay of the presentation 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 September 9, 2013) by
dialing 416-640-1917 and entering passcode 4638351 followed by the
number sign.
Notice 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' 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: core
capabilities that IWK is expected to add and ATS' ability to leverage
those into other markets; customer relationships that IWK is to bring
and expected impact on ATS; the potential consideration of future
acquisitions that would bring strategic fit with IWK; the continued
enhancement of IWK's portfolio; expected net debt and working capital
adjustments; funding of the transaction substantially from cash on
hand; the expected revenues and EBITDA of IWK in its first full year
with ATS; percentage of purchase price expected to be allocated to
goodwill; expected timing of closing the transaction and conditions in
relation thereto; contractual relationships to be addressed by the
parties; expected accretive effect and dollar impact to earnings per
share and cash flow per share. The risks and uncertainties that may
affect forward-looking statements include, among others: impact of the
global economy and the Eurozone sovereign debt crisis; general market
performance including capital market conditions and availability and
cost of credit; performance of the market sectors that IWK and ATS
serve; 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 the new customer programs; that this
acquisition is not integrated as quickly or effectively as planned or
expected; that strategic initiatives in relation to this acquisition
are delayed, not completed, or do not have intended positive impact;
inability to successfully expand through further acquisitions, due to
an inability to identify, negotiate and conclude one or more
acquisitions; or to raise, through debt or equity, or otherwise have
available, required capital; that IWK's business does not perform as
expected during 2013; that net debt and working capital adjustments as
of closing are other than as expected; that amount to be allocated to
goodwill is other than as currently expected; inability to close the
acquisition, or delays in closing it, resulting from failure or delays
in relation to satisfying conditions of closing, and/or addressing
certain contractual relationships prior to closing; labour disruptions;
that one or more customers, or other persons with which IWK has
contracted, experience insolvency or bankruptcy with resulting delays,
costs or losses; political, labour or supplier disruptions; the
development of superior or alternative technologies to those developed
by IWK; the success of competitors with greater capital and resources
in exploiting their technology; market risk for developing
technologies; risks relating to legal proceedings to which IWK 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's 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.
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 consumer
products & electronics, energy, life sciences and transportation. It
also leverages its many years of experience and skills to fulfill the
specialized automation product manufacturing requirements of customers.
Through its Ontario solar business, ATS participates in the solar
energy industry. ATS employs approximately 2,200 people at 20
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.
SOURCE: ATS Automation Tooling Systems Inc.
