ATS Announces Closing of $400 Million Senior Notes Offering

Rhea-AI Summary

ATS (TSX: ATS) (NYSE: ATS) has successfully closed its previously announced private placement offering of C$400 million aggregate principal amount of 6.50% senior unsecured notes due August 21, 2032. The company intends to use the net proceeds to pay outstanding amounts owed under the revolving line of credit available under its senior syndicated credit facility.

The offering was underwritten by a syndicate led by National Bank Financial Inc. and RBC Dominion Securities Inc. The notes were offered for sale in Canada to accredited investors on a private placement basis and in the United States to qualified institutional buyers only, pursuant to Rule 144A of the U.S. Securities Act.

Positive

• Successfully closed C$400 million senior notes offering
• 6.50% interest rate on senior unsecured notes
• Long-term debt maturity until August 21, 2032
• Proceeds to be used to pay down revolving credit line

Negative

• Increased long-term debt obligation
• Potential impact on future interest expenses

Insights

Financial Analyst

The successful closing of ATS 's C$400 million senior notes offering is a significant financial move. With a 6.50% interest rate and a 10-year maturity, this debt issuance provides ATS with long-term capital at a fixed cost. The company's decision to use the proceeds to pay down its revolving credit line suggests a strategic shift from short-term to long-term debt, potentially improving financial flexibility.

This transaction may impact ATS's capital structure and interest expenses. While it secures funding, investors should consider how this additional debt affects the company's leverage ratios and future cash flows. The private placement nature of the offering to accredited and institutional investors indicates a targeted approach to raising capital, possibly avoiding dilution for existing shareholders.

Market Research Analyst

ATS 's successful debt offering demonstrates investor confidence in the company's long-term prospects. The 6.50% interest rate, while reflecting current market conditions, suggests a balance between attractiveness to investors and manageable costs for ATS. The international scope of the offering, including both Canadian and U.S. markets, potentially broadens ATS's investor base.

Investors should note the timing of this offering amid fluctuating interest rates and economic uncertainties. ATS's ability to secure this funding may provide a competitive advantage in its industry. However, it's important to monitor how effectively the company utilizes this capital to drive growth and maintain financial health in the coming years.

CAMBRIDGE, Ontario--(BUSINESS WIRE)-- ATS Corporation (TSX: ATS) (NYSE: ATS) (“ATS” or the “Company”) confirmed today that it has successfully closed its previously announced private placement offering (the “Offering”) of C$400 million aggregate principal amount of 6.50% senior unsecured notes due August 21, 2032 (the “Notes”). As previously stated, the Company intends to use the net proceeds of the Offering to pay outstanding amounts owed under the revolving line of credit available under its senior syndicated credit facility.

The Offering was underwritten by a syndicate of underwriters, led by National Bank Financial Inc. and RBC Dominion Securities Inc, and included Scotia Capital Inc., TD Securities Inc., J.P. Morgan Securities Canada Inc., Raymond James Ltd., UniCredit Capital Markets LLC and Stifel Nicolaus Canada Inc.

The Notes were offered for sale in Canada to accredited investors on a private placement basis, in accordance with Canadian securities laws. The Notes were not registered under the U.S. Securities Act, or any state securities laws, and were offered and sold in the United States to qualified institutional buyers only, pursuant to Rule 144A of the U.S. Securities Act, and outside of the United States in accordance with Rule 903 of Regulation S under the U.S. Securities Act.

About ATS Corporation

ATS Corporation is an industry-leading automation solutions provider to many of the world's most successful companies. ATS uses its extensive knowledge base and global capabilities in custom automation, repeat automation, automation products and value-added solutions including pre-automation and after-sales services, to address the sophisticated manufacturing automation systems and service needs of multinational customers in markets such as life sciences, transportation, food & beverage, consumer products, and energy. Founded in 1978, ATS employs over 7,000 people at more than 65 manufacturing facilities and over 85 offices in North America, Europe, Southeast Asia and Oceania. The Company's common shares are traded on the Toronto Stock Exchange and the NYSE under the symbol ATS. Visit the Company's website at www.atsautomation.com.

Forward-looking Statements

This press release contains certain statements that may constitute forward-looking information and forward-looking statements within the meaning of applicable Canadian and United States securities laws (“forward-looking statements”). All such statements are made pursuant to the “safe harbour” provisions of Canadian provincial and territorial securities laws and the U.S. Private Securities Litigation Reform Act of 1995.

Forward-looking statements include all statements that are not historical facts regarding possible events, conditions or results of operations that ATS believes, expects or anticipates will or may occur in the future, including, but not limited to: the use of proceeds from the Offering of the Notes. Forward-looking statements are inherently subject to significant known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements of ATS, or developments in ATS’ business or in its industry, to differ materially from the anticipated results, performance, achievements, or developments expressed or implied by such forward-looking statements. Important risks, uncertainties, and factors that could cause actual results to differ materially from expectations expressed in the forward-looking statements include, but are not limited to, general market performance including market conditions and availability and cost of credit; and other risks and uncertainties detailed from time to time in ATS' filings with securities regulators, including, without limitation, the risk factors described in ATS’ annual information form for the fiscal year ended March 31, 2024, which are available on the System for Electronic Data Analysis and Retrieval+ (SEDAR+) at www.sedarplus.com and on the U.S. Securities Exchange Commission’s Electronic Data Gathering, Analysis and Retrieval System (EDGAR) at www.sec.gov. ATS has attempted to identify important factors that could cause actual results to materially differ from current expectations, however, there may be other factors that cause actual results to differ materially from such expectations.

Forward-looking statements are necessarily based on a number of estimates, factors, and assumptions regarding, among others, management's current plans, estimates, projections, beliefs and opinions; the future performance and results of the Company’s business and operations; and the ability of ATS to execute on its business objectives.

Forward-looking statements included herein are only provided to understand management’s current expectations relating to future periods and, as such, are not appropriate for any other purpose. Although ATS believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and ATS cautions you not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. ATS does not undertake any obligation to update forward-looking statements contained herein other than as required by law.

SOURCE: ATS Corporation

View source version on businesswire.com: https://www.businesswire.com/news/home/20240821587084/en/

For more information, contact:

David Galison

Head of Investor Relations

ATS Corporation

730 Fountain Street North

Cambridge, ON, N3H 4R7

(519) 653-6500

dgalison@atsautomation.com

For general media inquiries, contact:

Matthew Robinson

Director, Corporate Communication

ATS Corporation

730 Fountain Street North

Cambridge, ON, N3H 4R7

(519) 653-6500

mrobinson@atsautomation.com

Source: ATS Corporation

FAQ

What is the size and interest rate of ATS 's recent senior notes offering?

ATS (TSX: ATS) (NYSE: ATS) closed a C$400 million senior notes offering with a 6.50% interest rate.

When do the senior notes issued by ATS mature?

The senior unsecured notes issued by ATS are due on August 21, 2032.

How does ATS plan to use the proceeds from its senior notes offering?

ATS intends to use the net proceeds from the offering to pay outstanding amounts owed under the revolving line of credit available under its senior syndicated credit facility.

Who were the lead underwriters for ATS 's senior notes offering?

The offering was led by National Bank Financial Inc. and RBC Dominion Securities Inc. as part of a larger underwriting syndicate.