Automated Industrial Robotics Inc. Acquires Sewtec Automation

Rhea-AI Summary

Automated Industrial Robotics Inc. (AIR) has acquired Sewtec Automation, a UK-based industrial automation company. This strategic move expands AIR's geographic footprint and strengthens its engineering capabilities. The acquisition was primarily funded by an additional investment from an Ares Management Private Equity fund.

Sewtec brings over 170 team members and a 75,000 square-foot facility to AIR's portfolio. With this addition, AIR now has over 400 employees and 275,000 square feet of automation hub space across the US, Ireland, and the UK. The company aims to leverage this expanded capacity to deliver differentiated industrial automation solutions globally.

This acquisition aligns with AIR's growth strategy, positioning it to capitalize on the increasing global demand for manufacturing automation solutions across diverse sectors.

Positive

• Expansion of geographic footprint into the UK market
• Addition of 170 skilled team members to AIR's workforce
• Increase in automation hub space by 75,000 square feet
• Diversification of customer base across various sectors
• Strengthening of engineering capabilities and technical expertise
• Potential for synergies and knowledge sharing among AIR's portfolio companies

Negative

• Potential integration challenges and costs associated with merging operations
• Increased complexity in managing a larger, more diverse organization
• Possible short-term financial strain due to acquisition costs

Insights

Financial Analyst

The acquisition of Sewtec Automation by Automated Industrial Robotics Inc. (AIR) is a strategic move that significantly expands AIR's global presence and capabilities. This transaction strengthens AIR's position in the growing industrial automation market, potentially leading to increased revenue streams and market share. The addition of Sewtec's 75,000 square-foot facility and 170 team members boosts AIR's operational capacity and expertise.

With AIR now having over 400 employees and 275,000 square feet of automation hub space across three countries, the company is well-positioned for economies of scale and synergies. The diversification of AIR's customer base across various sectors, including pharmaceutical and e-commerce, could lead to more stable revenue and reduced risk. Investors should note the backing of Ares Management Private Equity, suggesting strong financial support for future growth and acquisitions.

Tech Expert

The acquisition of Sewtec Automation significantly enhances AIR's technological capabilities in the industrial automation sector. Sewtec's track record of inventing over 7,000 industrial automation systems brings valuable intellectual property and innovation potential to AIR. This merger could accelerate R&D efforts and lead to more advanced automation solutions.

The combined expertise of Sewtec, TA Systems and Modular under AIR's umbrella creates a powerhouse of engineering talent. This could result in faster development of cutting-edge technologies and more efficient problem-solving for complex automation challenges. The expanded geographic footprint also allows for greater localization of technology to meet specific regional needs, potentially opening up new market opportunities and driving innovation in the global industrial automation landscape.

Market Research Analyst

AIR's acquisition of Sewtec Automation is a strategic response to the increasing global demand for manufacturing automation solutions. This move aligns with industry trends towards Industry 4.0 and smart manufacturing. The expanded customer base across diverse sectors like pharmaceuticals, food and beverage and e-commerce positions AIR to capitalize on multiple high-growth markets.

The geographic expansion into the UK complements AIR's existing presence in the US and Ireland, potentially providing a competitive edge in the European market. This could be particularly advantageous given the current focus on reshoring and nearshoring manufacturing operations. Investors should monitor how AIR leverages this expanded footprint to secure new contracts and partnerships, as well as its ability to integrate Sewtec's operations smoothly to realize the full potential of this acquisition.

Transaction Advances AIR’s Growth Strategy With New Capabilities Across Expanded Footprint and Diversified Customer Base

LOS ANGELES--(BUSINESS WIRE)-- Automated Industrial Robotics Inc. (“AIR” or the “Company”) today announced the acquisition of Sewtec Automation (“Sewtec”), a leading industrial automation company based in the United Kingdom. The transaction expands AIR’s geographic footprint, strengthens its engineering capabilities and further positions the Company to capitalize on the increasing global demand for manufacturing automation solutions across a diversified customer base. The transaction was funded primarily by an additional investment from an Ares Management Private Equity fund (“Ares”).

Founded in 1983, Sewtec brings over 170 team members dedicated to advancing its mission to solve complex problems through engineering innovation and excellent customer service. Sewtec operates out of a 75,000 square-foot design and manufacturing facility, serving a range of brands across various sectors, including pharmaceutical, medical devices, food and beverage, personal care, pet care and e-commerce. With over 7,000 industrial automation systems invented, Sewtec prides itself on its technical expertise, industry knowledge and experience working across a wide variety of sectors to develop solutions that improve its customers’ processes.

Sewtec joins Totally Automated Systems (“TA Systems”) and Modular Automation (“Modular”) as a foundational asset of the AIR portfolio. With the acquisition of Sewtec, AIR now has over 400 employees and an automation hub footprint of approximately 275,000 square feet across the United States, Ireland and the United Kingdom. By leveraging the significant engineering experience and capabilities in each of these hubs, AIR is advancing its goal to seamlessly deliver differentiated industrial automation solutions and service to its global customer base. With Ares’ support, AIR expects to seek to further expand its platform through future strategic acquisitions of industrial automation companies with strong operational histories and tenured management teams, in addition to continued investment in its organic growth strategy.

AIR Executive Chairman Brian Klos and Chief Executive Officer Darragh de Stonndún said, “The acquisition of Sewtec represents a significant milestone for AIR. We have long been admirers of the quality of the automation solutions Sewtec has developed for their loyal customer base. We believe that sharing the respective strengths of Sewtec, TA Systems and Modular through AIR will help accelerate our businesses’ abilities to enhance efficiencies, drive technological innovation and deliver industry-leading automation solutions to our partners.”

Mark Cook, Co-Managing Director of Sewtec and newly appointed Chief Operating Officer of AIR, said, “This transaction represents an exciting new chapter in Sewtec’s long history. I believe AIR is the right partner for Sewtec as we look to grow our business with existing and new customers. We look forward to leveraging the skills and know-how across AIR to further our ability to invent innovative solutions that help our customers solve complex operational challenges. As Chief Operating Officer of AIR, I look forward to working with team members across the Company to execute on our shared vision of creating a cohesive, global industrial automation platform.”

Matt Cwiertnia, Partner and Head of the Ares Private Equity Group, said, “Ares is proud to continue its support of AIR’s growth through this latest acquisition of Sewtec. This reinforces our shared goal of building AIR into a scaled player with a global manufacturing footprint, and we look forward to continuing to work with the Company to meet the significant and growing demand for high quality automation solutions.”

Terms of the transaction were not disclosed.

About Automated Industrial Robotics Inc.

AIR is an industrial automation company focused on acquiring and facilitating the growth of leading industrial automation companies serving diverse end markets with strong operational histories and tenured management teams. Grounded in a culture of safety, transparency and pursuit of excellent customer experience, AIR seeks to leverage complementary teams and technologies to deliver innovative, cost-competitive solutions to address the complex and challenging needs of global businesses. AIR is currently serving a global customer base across three facilities located in the United States, Ireland and the United Kingdom.

About Sewtec Automation

Sewtec Automation provides industrial automation solutions for global blue-chip clients in the pharmaceutical, medical devices, food and beverage, personal care, pet care and e-commerce markets. Sewtec specialises in providing bespoke solutions to address its customers’ most challenging automation requirements. It currently employs over 170 high skilled people at its manufacturing facility in Wakefield, UK and at its new satellite office in Taunton, UK. For more information, please visit the Sewtec Automation website at https://www.sewtec.co.uk/.

About Ares Management Corporation

Ares Management Corporation (NYSE: ARES) is a leading global alternative investment manager offering clients complementary primary and secondary investment solutions across the credit, real estate, private equity and infrastructure asset classes. We seek to provide flexible capital to support businesses and create value for our stakeholders and within our communities. By collaborating across our investment groups, we aim to generate consistent and attractive investment returns throughout market cycles. As of June 30, 2024, Ares Management Corporation's global platform had over $447 billion of assets under management with more than 2,950 employees operating across North America, Europe, Asia Pacific and the Middle East. For more information, please visit www.aresmgmt.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240820987074/en/

Ares Management

Jacob Silber, +1-212-301-0376

media@aresmgmt.com or media.europe@aresmgmt.com

Source: Automated Industrial Robotics Inc.

FAQ

What company did Automated Industrial Robotics Inc. (AIR) acquire?

AIR acquired Sewtec Automation, a leading industrial automation company based in the United Kingdom.

How was the acquisition of Sewtec Automation funded?

The acquisition was primarily funded by an additional investment from an Ares Management Private Equity fund.

What is the total employee count and automation hub space of AIR after the Sewtec acquisition?

After the acquisition, AIR now has over 400 employees and an automation hub footprint of approximately 275,000 square feet across the United States, Ireland, and the United Kingdom.

What sectors does Sewtec Automation serve?

Sewtec serves various sectors including pharmaceutical, medical devices, food and beverage, personal care, pet care, and e-commerce.

Who was appointed as the new Chief Operating Officer of AIR following the acquisition?

Mark Cook, previously the Co-Managing Director of Sewtec, was appointed as the new Chief Operating Officer of AIR.