Scott Technology to buy American robot integrator for up to US$7.7m
Scott Technology [NZX: SCT], the industrial automation firm, has bought Marion, Ohio-based RobotWorx for up to US$7.7 million in cash and shares as it looks to expand its footprint in North America.
The Dunedin-based company will pay US$5.4 million in cash, funded by bank debt, and US$900,000 in Scott shares for the US robot integrator, with potential earn-out of up to US$2.3 million in shares if certain targets are met over the coming three years, it said in a statement. The shares have been issued at $1.6157 apiece, a discount to the $1.80 price the stock opened at. The shares rose 1.1 percent to $1.82 after the announcement.
RobotWorx programmes and fits-out industrial robots so as to allow them to perform automated manufacturing, with the capability to integrate robots from different manufacturers.
"The transaction will be earnings positive for the Scott Group, while the earn-out arrangement will provide a strong incentive for the vendor and RobotWorx management to continue to grow the business," Scott said in a statement. "The acquisition of RobotWorx will provide Scott with a strong strategic base to grow its market share in the Americas."
In March, the Dunedin manufacturer reported a 63 percent slide in first-half profit as the strong kiwi dollar eroded export earnings and stiff competition pushed down margins.
At the time, the company said it had evaluated a number of potential acquisitions in the period, rejecting some while others remained under consideration.
RobotWorx chief executive and owner Keith Wanner will work with Scott to ensure a smooth transition, the company said.
Scott said one of the attractions was RobotWorx's internet presence, which it says dominates global competitors.
"By applying the RobotWorx digital marketing strategy to the Scott business model, Scott will also have the ability to dominate the internet in areas of Scott expertise, significantly raising its profile in both its key North American market and beyond," the company said.