Novanta to Acquire Sensor, Tooling Maker ATI Industrial Automation for $172M

Novanta Inc., which supports industrial and medical equipment manufacturers, today announced today that it has agreed to acquire privately held robotic tooling maker ATI Industrial Automation for $172 million upfront in cash and additional contingent cash payments associated with 2021 financial performance.

"ATI is a fantastic business with proprietary intellectual property in attractive and growing markets,” stated Matthijs Glastra, chairman and CEO of Novanta. "The business adds intelligent technology solutions and expands Novanta’s position in mission-critical robotic applications, such as electric vehicle production, medical robotics, and collaborative robotics."

Bedford, Mass.-based Novanta said it offers proprietary technology expertise and competencies in photonics, vision, and precision motion, as well as a proven ability to solve complex technical challenges. The company said it engineers core components and subsystems that can deliver extreme precision and performance, tailored to our customers’ demanding applications. Novanta also acquired Schneider Electric Motion USA for $115 million this month.

ATI supplies robotics accessories

Founded in 1989, ATI said it supplies intelligent end-of-arm tooling to original equipment manufacturers (OEMs) for advanced industrial and surgical robots. The Apex, N.C.-based company develops, manufactures, and sells products such as robotic changing systems, force/torque sensors, and collision sensors for industrial, collaborative, and healthcare robotic applications. ATI has more 350 employees.

"We are excited to join Novanta at this stage of our development. We expect the combination of competencies and cultures to create better opportunities for our customers and employees," said Bob Little, CEO of ATI. "We feel confident our shared values, our passion for innovation, and our deep application knowledge will create stronger partnerships with our customers to help us accelerate our strategic goals.”

Transaction details

The $172 million acquisition is expected to be accretive to Novanta's free cash flow and non-GAAP (generally accepted accounting principles) earnings per share on a full year basis. ATI’s expected 2021 revenue will be greater than $70 million on a full-year basis.

ATI's actual revenue and profit contribution to Novanta's 2021 financial results will depend on the ultimate date of the closing of the transaction, among other factors. In addition, to further incentivize future financial performance, Novanta will grant performance stock units.

"The transaction creates a nearly $250 million precision motion segment, with significant engineering competency to further accelerate our growth,” said Glastra.

The transaction is subject to customary closing conditions, including regulatory approvals, and will be financed using available cash and the company’s revolving credit facility. The transaction is expected to close in the third quarter of 2021.