ATS Announces Closing Of Additional $200 Million Senior Notes Offering

Rhea-AI Summary

ATS has successfully completed its previously announced private placement offering of C$200 million in senior unsecured notes with a 6.50% interest rate, due August 21, 2032. These notes are fungible with the company's existing $400 million senior unsecured notes issued on August 21, 2024, sharing identical terms. The company plans to use the net proceeds to pay outstanding amounts on its revolving credit line under its senior syndicated credit facility.

The offering was led by National Bank Financial Inc. and RBC Dominion Securities Inc., along with several other financial institutions. The notes were offered privately in Canada and to qualified institutional buyers in the United States under Rule 144A.

Positive

• Successful raising of additional C$200 million through senior notes
• Debt restructuring from revolving credit to fixed-term notes
• Strong institutional backing with multiple major underwriters

Negative

• Additional long-term debt obligation at 6.50% interest rate
• Increased interest expense burden through 2032

Insights

Fixed Income Analyst

The successful placement of C$200 million senior notes at 6.50% demonstrates strong market confidence in ATS's creditworthiness. This additional issuance, which brings the total outstanding amount to C$600 million, allows for enhanced liquidity management by refinancing revolving credit facilities with longer-term debt. The 6.50% coupon rate, while reflecting current market conditions, provides investors with an attractive yield for investment-grade corporate debt. The 2032 maturity extends ATS's debt profile, reducing near-term refinancing risks.

The syndicate's composition, featuring major financial institutions, indicates robust institutional backing. The fungibility with existing notes will enhance trading liquidity once the hold period expires. This debt restructuring strategy optimizes ATS's capital structure by converting short-term bank debt into longer-duration bonds, potentially reducing interest rate sensitivity and improving financial flexibility.

Corporate Finance Strategist

The strategic refinancing move strengthens ATS's balance sheet structure by replacing variable-rate bank debt with fixed-rate bonds. This transaction effectively locks in current interest rates for an extended period, providing predictable debt servicing costs through 2032. The private placement format, targeting qualified institutional buyers, suggests a sophisticated investor base and potentially lower execution costs compared to public offerings.

For simpler understanding: Think of this like refinancing a variable-rate mortgage to a fixed-rate one, but at a corporate scale. ATS is essentially trading short-term, potentially volatile debt for long-term, predictable payments. This helps them better plan their future expenses and protects against potential interest rate increases.

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$200 million aggregate principal amount of 6.50% senior unsecured notes due August 21, 2032 (the “Notes”). The Notes have identical terms and will be fungible (following the expiry of the applicable statutory hold period) with, and are a part of a single series with, the $400 million aggregate principal amount of 6.50% senior unsecured notes due August 21, 2032 issued by the Company on August 21, 2024. 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., Stifel Nicolaus Canada Inc., and UniCredit Capital Markets LLC.

The Notes were offered for sale in Canada on a private placement basis pursuant to certain prospectus exemptions. The Notes were not registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws, and were offered and sold in the United States only to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the U.S. Securities Act and applicable state securities law and outside of the United States in offshore transactions in reliance on 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 7,500 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 New York Stock Exchange 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241218239199/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 interest rate and maturity date of ATS's new senior notes offering?

The senior notes have a 6.50% interest rate and mature on August 21, 2032.

How much did ATS raise in their latest senior notes offering?

ATS raised C$200 million through their latest senior notes offering.

What will ATS use the proceeds from the senior notes offering for?

ATS will use the net proceeds 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?

National Bank Financial Inc. and RBC Dominion Securities Inc. led the underwriting syndicate for the offering.

What is the total amount of ATS's 6.50% senior notes due 2032?

The total amount is C$600 million, comprising the new C$200 million offering and the previous C$400 million issued on August 21, 2024.