Market News

ATS Acquires NCC Automated Systems for $40M

ATS Automation Tooling Systems (ATA), a Canadian provider of automation solutions, has acquired NCC Automated Systems, a conveyor systems manufacturer, for $40 million.

NCC’s president, Kevin Mauger, will continue to lead the company, which employs 92 people at its U.S. manufacturing facility. (See ATS Automation Tooling Systems stock charts on TipRanks)

“NCC’s strong design software toolkit also allows us to play a more holistic role in supporting the needs of our customers from the design phase through to implementation by bridging the connection between the design engineer and manufacturing operator,” said ATS CEO Andrew Hider.

ATS expects to realize approximately $1.2 million in annual cost synergies, including supply chain savings and operational efficiencies, as well as double-digit returns on invested capital (ROIC) by the third year, following completion of the acquisition.

Last month, TD Securities analyst Cherilyn Radbourne reiterated a Buy rating on ATA while raising its price target to C$48. This implies 2.9% upside potential.

Overall, consensus on the Street is that ATA is a Strong Buy, based on three Buys. The average ATS Automation price target of C$50.50 implies 8.3% upside potential to current levels. Shares have more than doubled in value year-to-date.

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