ATS Automation to acquire Sortimat, maker of healthcare assembly systems
ATS Automation Tooling Systems will acquire Sortimat Group, a manufacturer of specialized assembly systems for medical products and pharmaceutical dosing devices.
ATS Automation Tooling Systems (Cambridge, ON, Canada) has entered into a definitive agreement to acquire the Sortimat Group (Stuttgart, Germany), a manufacturer of specialized assembly systems for medical products and pharmaceutical dosing devices.
Established in 1959, Sortimat has significant experience in advanced system development, manufacturing, handling, and feeder technologies. Sortimat designs systems primarily for the medical products and pharmaceutical devices markets. Over its successful history, it has delivered more than 2,500 programs to global companies.
Sortimat's flagship assembly automation and handling operations are located near Stuttgart where it employs more than 70% of its 450 employees. It also has locations in Chicago and a small, 60% owned joint venture in India.
In calendar 2009, Sortimat had revenues of approximately Euro 57 million and a high single digit EBITDA margin. Healthcare accounts for approximately 75%of Sortimat's worldwide revenue with the balance derived from consumer and automotive markets. Geographically, 80% of revenues are derived from European customers.
The final purchase price is expected to be up to Euro 45 million. At closing, ATS will make a payment of Euro 38.4 million from existing cash balances. Future payments of up to Euro 6.6 million are payable subject to achievement of milestones related to EBIT performance and specific management services over the next 2.5 years. ATS expects to complete the acquisition in the first quarter of fiscal 2011, subject to customary closing conditions, including applicable regulatory approval. The acquisition is expected to be accretive to EBIT and cash flow.
The acquisition of Sortimat aligns with ATS's stated strategy of expanding its leading position in the global automation market and enhancing growth opportunities, particularly in strategic segments, such as healthcare. The acquisition will be funded with cash on hand, making effective use of ATS' strong cash position.
"We welcome the addition of Sortimat's highly skilled people, customers, complementary technologies, scale and presence to our world leading automation business," said Anthony Caputo, ATS Chief Executive Officer. "This acquisition gives us the critical mass to organize ATS marketing and divisions into a group focused on healthcare and we intend to grow our exposure to this attractive market by helping our customers differentiate themselves from their competitors."
ATS will target margin improvements at Sortimat through expat deployment and the application of ATS best practices in command and control, program management, performance management and approach to market.
Posted by Vision Systems Design