-- Acquires global leading supplier of medical insufflators, pumps, and related disposables to Original Equipment Manufacturers in the minimally invasive surgery market
Novanta Inc. (NASDAQ: NOVT) (the "Company", "we", "our", "Novanta"), a
trusted technology partner to medical and advanced technology equipment
manufacturers, announced today that it has reached an agreement to
acquire privately-held World of Medicine GmbH ("World of Medicine") for
€115 million in cash. The transaction is expected to close in the third
quarter of 2017.
"Our agreement to acquire World of Medicine represents another milestone
in Novanta's strategy to broaden and deepen our medical end market
presence," said Matthijs Glastra, Chief Executive Officer of Novanta
Inc. "We are excited for the World of Medicine team to join Novanta and
believe the combination of our two companies will create substantial and
lasting value for our customers, our employees, and our shareholders. We
see World of Medicine as a foundation for future growth, and as the
cornerstone of our expansion in the minimally invasive surgical market."
World of Medicine, based in Berlin, Germany, is the leading supplier to
original equipment manufacturers ("OEM") of regulatory controlled
medical insufflators, pumps, and related disposables for the minimally
invasive surgical market. World of Medicine, with more than 50 patents,
is regarded as one of the pioneers in equipment for minimally invasive
medicine for more than forty years. The business operates as a full
service OEM provider, which includes developing customized solutions for
mission critical applications, clinical validation, regulatory approval
support, training, and service.
Both World of Medicine and Novanta provide highly engineered innovative
solutions to a broad spectrum of minimally invasive surgery OEM
customers. World of Medicine's presence in Germany provides Novanta
significant sales, regulatory, R&D and manufacturing capabilities
in Europe, an important market for Novanta.
"The World of Medicine team has been tremendously successful in building
a growing high quality company, with a strong track record of innovation
and technology leadership in the medical market," said Matthijs Glastra.
"This combination strengthens both companies and establishes a growing
platform with $120 million in sales to the minimally invasive medicine
market. Together, we will be able to better serve our customers in
endoscopy, robotic surgery and other minimally invasive surgery
applications with a broader offering and a global reach. We expect that
this platform of diverse and complementary capabilities will open up new
commercial opportunities including new future growth product categories
over time."
"Joining Novanta is a strong next step in the progression of World of
Medicine and we are delighted to join an organization committed to the
medical market and to serving OEM customers, of which we have many in
common," said Dr. Clemens Scholz, Chief Executive Officer of World of
Medicine. "By joining Novanta, we feel more confident in our ability to
continue to grow and serve our customers' needs globally and to
accelerate our innovation engine to remain the leading full service
medical OEM supplier in existing and future business fields."
The total purchase price of €115 million will be financed using the
Company's amended & restated credit facility. The transaction, which is
expected to be accretive to Novanta's free cash flow and non-GAAP
earnings per share, is expected to add approximately €75 million in
revenue to Novanta's financial results on a full year pro forma basis.
World of Medicine's actual revenue and profit contribution to Novanta's
2017 financial results will depend on the ultimate date of the closing
of the transaction, among other factors.
Conference Call Information
The Company will host a conference call on Tuesday, June 6,
2017 at 10:00 a.m. ET to discuss the transaction. Matthijs Glastra,
Chief Executive Officer, and Robert Buckley, Chief Financial Officer,
will host the conference call.
To access the call, please dial (877) 482-5124 or (734) 385-2496 prior
to the scheduled conference call time. The conference ID number is
5086999.
A playback of this conference call will be available beginning 1:00 p.m.
ET, Tuesday, June 6, 2017. The playback phone number is (855) 859-2056
or (404) 537-3406 and the code number is 5086999. The playback will
remain available until 11:00 p.m. ET, Thursday, July 6, 2017.
A replay of the audio webcast will be available approximately three
hours after the conclusion of the call on the Investor Relations section
of the Company's website at www.novanta.com.
Safe Harbor and Forward-Looking Information
Certain statements in this release 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. These forward-looking statements
include, but are not limited to, statements regarding operating or
financial results, the success of our internal plans, the expectation
that the acquisition of World of Medicine will close in the third
quarter of 2017, and the expectations for the acquisition of World of
Medicine to contribute to our future revenue, free cash flow and
non-GAAP earnings per share. All statements contained in this
news release 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. Such statements reflect the current beliefs of Company
management and are not guarantees of future performance. The
forward-looking statements involve risks and uncertainties that could
cause actual results to differ materially from those contained in any
forward-looking statement. Such risks and uncertainties include our
ability to make and integrate our acquisitions and realize expected
synergies. We also face other general risks, including our
ability to realize cost savings from our operating initiatives; general
economic conditions; unfavorable changes in foreign currency exchange
rates; difficulties associated with exports; risks associated with our
international operations; risks associated with newly acquired
businesses; our significant dependence upon our customers' capital
expenditures, which are subject to cyclical market fluctuations;
increased warranty exposure; future competition; violations of our
intellectual property rights and our ability to protect our intellectual
property against infringement by third parties; our ability to attract
and retain key personnel; disruptions in the supply of certain key
materials or components; changes in the price for certain parts and
components; changes in interest rates; changes in tax laws; credit
ratings; failure to comply with local import and export regulations in
the jurisdictions in which we operate; risks and cost associated with
potential write-offs of our substantial intangible assets; and risks
associated with maintaining regulatory compliance. Other
important risk factors that could affect the outcome of the events set
forth in these statements and that could affect the Company's operating
results and financial condition are discussed in Item 1A of our Annual
Report on Form 10-K for the fiscal year ended December 31, 2016, our
subsequent filings with the Securities and Exchange Commission ("SEC"),
and in our future filings with the SEC. Such statements are based on the
Company's beliefs and assumptions and on information currently available
to the Company. The Company disclaims any obligation to update any
forward-looking statements as a result of developments occurring after
the date of this document, except as required by applicable law.
About Novanta
Novanta is a leading global supplier of core technology solutions that
give healthcare and advanced industrial original equipment manufacturers
("OEMs") a competitive advantage. We combine deep proprietary technology
expertise and competencies in photonics, vision and precision motion
with a proven ability to solve complex technical challenges. This
enables Novanta to engineer core components and sub-systems that deliver
extreme precision and performance, tailored to our customers' demanding
applications. The driving force behind our growth is the team of
innovative professionals who share a commitment to innovation and
customer success. Novanta's common shares are quoted on NASDAQ under the
ticker symbol "NOVT".
More information about Novanta is available on the Company's website at www.novanta.com.
For additional information, please contact Novanta Inc. Investor
Relations at (781) 266-5137 or InvestorRelations@Novanta.com.