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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 18, 2021

 

NOVANTA INC.

(Exact name of registrant as specified in its charter)

 

 

New Brunswick, Canada

001-35083

98-0110412

(State or other jurisdiction

of incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

 

 

 

125 Middlesex Turnpike

Bedford, Massachusetts

 

01730

(Address of principal executive offices)

 

(Zip Code)

Registrant’s telephone number, including area code: (781) 266-5700

Not Applicable

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common shares, no par value

 

NOVT

 

Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

 

 

 


 

Item 1.01 Entry into a Material Definitive Agreement.

 

On July 18, 2021, Novanta Corporation (the “U.S. Buyer”), a wholly-owned subsidiary of Novanta Inc., and Novanta Technologies (Suzhou) Co. Ltd., a wholly-owned subsidiary under Novanta Inc. (the “China Buyer” and, together with the U.S. Buyer, the “Buyer”), entered into a Stock Purchase Agreement (the “Purchase Agreement”) with ATI Industrial Automation, Inc. (“ATI”), ATI’s wholly-owned subsidiary, ATI Industrial Automation (Lang Fang) Co. Ltd. (“ATI China”), each of ATI’s shareholders, and BLDP, LLC, as representative of ATI’s shareholders. The Purchase Agreement provides that, upon the terms and subject to the conditions set forth in the Purchase Agreement, the U.S. Buyer and the China Buyer agree to acquire all of the capital stock of ATI and ATI China, respectively (collectively, the “ATI Acquisition”).

 

Pursuant to the terms of the Purchase Agreement, the Buyer has agreed to pay ATI’s shareholders an initial purchase price of $172.0 million in cash upon the closing of the ATI Acquisition, subject to certain customary closing adjustments, as well as an additional contingent cash payment in the first half of 2022 based on ATI’s 2021 adjusted EBITDA, as defined in the Purchase Agreement.  A portion of the upfront consideration will be placed in escrow upon the closing of the ATI Acquisition to satisfy certain purchase price adjustments and indemnification obligations.  

 

The completion of the ATI Acquisition is subject to certain conditions, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The ATI Acquisition is expected to be completed in the third quarter of 2021. The Buyer intends to fund the ATI Acquisition using cash on hand and by drawing on Novanta Inc.’s revolving credit facility.

 

 

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

The information set forth in Item 1.01 in connection with the planned drawdown on Novanta’s revolving credit facility to fund a substantial majority of the initial purchase price for the ATI Acquisition is incorporated in this Item 2.03 by reference.

 

 

Item 7.01 Regulation FD Disclosure.

 

On July 19, 2021, Novanta Inc. issued a press release, announcing the signing of the Purchase Agreement. A copy of the press release is attached hereto as Exhibit 99.1.

 

Also on July 19, 2021, Novanta Inc. will hold a conference call to discuss the ATI Acquisition. A copy of the conference call presentation is attached hereto as Exhibit 99.2 and is also available on the Novanta Inc.’s website, https://www.novanta.com, in the Investor Relations section.

 

The information contained in Exhibit 99.1 and Exhibit 99.2 is furnished under this Item 7.01 and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference in any filing thereunder or under the Securities Action of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

 

Forward-Looking Statements

 

Certain statements in this Form 8-K are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and are based on current expectations and assumptions that are subject to risks and uncertainties. All statements contained in this Form 8-K that do not relate to matters of historical fact should be considered forward-looking statements, and are generally identified by words such as “expect,” “intend,” “anticipate,” “estimate,” “believe,” “future,” “could,” “should,” “plan,” “aim,” and other similar expressions. These forward-looking statements include, but are not limited to, statements regarding the ATI Acquisition, including that the acquisition is expected to be completed in the third quarter of 2021; sources of funding for the ATI Acquisition; benefits of the ATI Acquisition; our expectation that ATI expands Novanta’s position in industrial and surgical robotics, adds intelligent technology solutions and expands our position in mission critical robotic applications, such as electric vehicle production, medical robotics, and collaborative robotics; our expectation that the ATI Acquisition will increase the scale of our Precision Motion segment and will create stronger partnerships with our customers to help us accelerate our strategic goals with an ability to cross sell to our mutual customers; ATI’s expected 2021 revenues; our expectation that the ATI Acquisition will be accretive to our free cash flows and non-GAAP earnings per share; expectations for our leverage ratio at the end of fiscal year 2021; and other statements that are not historical facts.

These forward-looking statements are neither promises nor guarantees, but involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including, but not limited to, the following: our ability to


make and integrate acquisitions and realize expected benefits and synergies; economic and political conditions and the effects of these conditions on our customers’ businesses and level of business activities; risks associated with the COVID-19 pandemic and other events outside our control; our significant dependence upon our customers’ capital expenditures, which are subject to cyclical market fluctuations; our dependence upon our ability to respond to fluctuations in product demand; our ability to continually innovate and successfully commercialize our innovations; failure to introduce new products in a timely manner; customer order timing and other similar factors beyond our control; disruptions or breaches in security of our information technology systems; our failure to comply with data privacy regulations; changes in interest rates, credit ratings or foreign currency exchange rates; risks associated with our operations in foreign countries; our increased use of outsourcing in foreign countries; risks associated with increased outsourcing of components manufacturing; our exposure to increased tariffs, trade restrictions or taxes on our products; negative effects on global economic conditions, financial markets and our business as a result of the United Kingdom’s withdrawal from the European Union; violations of our intellectual property rights and our ability to protect our intellectual property against infringement by third parties; risk of losing our competitive advantage; our ability to attract and retain key personnel; our restructuring and realignment activities and disruptions to our operations as a result of consolidation of our operations; product defects or problems integrating our products with other vendors’ products; disruptions in the supply of certain key components or other goods from our suppliers; our failure to accurately forecast component and raw material requirements leading to excess inventories or delays in the delivery of our products; production difficulties and product delivery delays or disruptions; our exposure to medical device regulations, which may impede or hinder the approval or sale of our products and, in some cases, may ultimately result in an inability to obtain approval of certain products or may result in the recall or seizure of previously approved products; potential penalties for violating foreign, U.S. federal, and state healthcare laws and regulations; impact of healthcare industry cost containment and healthcare reform measures; changes in governmental regulations affecting our business or products; our compliance, or failure to comply, with environmental regulations; our failure to implement new information technology systems and software successfully; our failure to realize the full value of our intangible assets; our exposure to the credit risk of some of our customers and in weakened markets; our reliance on third party distribution channels; being subject to U.S. federal income taxation even though we are a non-U.S. corporation; changes in tax laws, and fluctuations in our effective tax rates; any need for additional capital to adequately respond to business challenges or opportunities and to repay or refinance our existing indebtedness, which may not be available on acceptable terms or at all; our existing indebtedness limiting our ability to engage in certain activities; volatility in the market price for our common shares; and our failure to maintain appropriate internal controls in the future.

These forward-looking statements are neither promises nor guarantees, but involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including, but not limited to, the failure to satisfy or waive the closing conditions contained in the Purchase Agreement. Other important risk factors that could affect the outcome of the events set forth in these statements are discussed in Item 1A of Novanta Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, its subsequent filings with the Securities and Exchange Commission (“SEC”), and its future filings with the SEC. Forward-looking statements are based on Novanta Inc.’s beliefs and assumptions and on information currently available to Novanta Inc. Novanta Inc. disclaims any obligation to update any forward-looking statements as a result of developments occurring after the date of this Form 8-K except as required by law.

 

Item 9.01  Financial Statements and Exhibits

 

(d) Exhibits:

 

Exhibit

Number

 

Description

99.1

 

Press Release dated July 19, 2021

99.2

 

Investor Conference Call Presentation dated July 19, 2021

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document)


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

Novanta Inc.

 

 

 

 

Date: July 19, 2021

 

By:

/s/ Robert J. Buckley

 

 

 

Robert J. Buckley

 

 

 

Chief Financial Officer