CAMBRIDGE, Ontario - ATS Corporation (TSX: ATS) (NYSE: ATS), a global provider of automation solutions, announced its definitive agreement to acquire Paxiom Group, a packaging machine provider serving several regulated industries. The acquisition is part of ATS's strategy to expand its presence in regulated markets such as food and beverage, and life sciences.
Paxiom Group, headquartered in Montreal, Quebec, is recognized for its primary, secondary, and end-of-line packaging machines. The company's diverse product range is expected to complement ATS's existing portfolio, which includes businesses like CFT, Raytec, Marco, IWK, and NCC. Paxiom's offerings span across precision weigh filling, bagging, wrapping, labeling, and palletizing equipment.
In the calendar year ending December 31, 2023, Paxiom reported revenues of approximately $67 million with an adjusted EBITDA margin above 19%. The majority of this revenue originated from North America. Paxiom's workforce comprises about 200 employees who serve a strong customer base across multiple sectors.
Andrew Hider, CEO of ATS Corporation, highlighted the organic and synergistic growth opportunities that Paxiom's integration is anticipated to bring, including an accretive margin profile. Jeremy Patten, President of ATS Products & Food Technology, also noted that Paxiom's differentiated solutions would significantly expand ATS's value proposition to customers.
The financial terms of the transaction, which is expected to close in the third calendar quarter of 2024, have not been disclosed. ATS plans to fund the purchase through cash and its revolving credit facility.
The acquisition is subject to customary closing conditions. This move by ATS signals a strategic expansion in its capabilities to offer comprehensive packaging and end-of-line solutions, aiming to enhance its market position and customer support.
This news is based on a press release statement from ATS Corporation.
InvestingPro Insights
ATS Corporation (NYSE: ATS), with its strategic acquisition of Paxiom Group, is poised to strengthen its market position in the automation solutions sector. The company's financial health and stock performance provide a context for understanding the potential impact of this deal. According to the latest InvestingPro data, ATS Corporation has a market capitalization of $3.87 billion and a P/E ratio of 24.4, which is adjusted to 21.72 when considering the last twelve months as of Q3 2024. This indicates a valuation that acknowledges the company's earnings potential.
The company's revenue growth is notable, with a 21.33% increase in the last twelve months as of Q3 2024, demonstrating a robust expansion of its business operations. This aligns with the company's strategic goals, as the acquisition of Paxiom Group is expected to further enhance ATS's offerings in regulated industries. Furthermore, ATS has shown a solid gross profit margin of 28.63% in the same period, which may be bolstered by the integration of Paxiom's high-margin product range.
One of the InvestingPro Tips highlights that analysts predict ATS Corporation will be profitable this year, which is consistent with the company's recent performance, having been profitable over the last twelve months. However, it is important to note that seven analysts have revised their earnings downwards for the upcoming period, suggesting that investors should monitor the company's performance closely post-acquisition.
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