ATS Corporation has announced today that it has entered into an underwriting agreement with a group of underwriters for the sale of an additional $200 million in senior unsecured notes due 2032, marking the reopening of its previous issuance. The offering represents an upsizing from the initial target of $150 million. This private placement offering (the “Offering”) will help ATS strengthen its financial position by raising funds to pay off outstanding debts under its senior syndicated credit facility.
The Notes, which carry a fixed interest rate of 6.50%, will be issued at a price of 100.625% of their face value, plus accrued interest from August 21, 2024. This pricing results in a yield to call of 6.341%. The terms of the newly issued Notes will mirror those of the $400 million in 6.50% senior unsecured notes due 2032 that were originally issued by ATS on August 21, 2024, with the only differences being the date of issuance and the issuance price. These additional Notes will be fungible with the previously issued Notes once the statutory hold period expires, combining to form a single series.
ATS intends to use the net proceeds from the offering to reduce its outstanding borrowings under its revolving line of credit, part of its senior syndicated credit facility. This move reflects ATS’s ongoing efforts to manage its debt structure and maintain strong liquidity, positioning the company for continued growth and operational flexibility.
The offering is expected to close on or about December 19, 2024, assuming all customary closing conditions are met. As part of the offering, the Notes will be offered for sale on a private placement basis in Canada, in reliance on certain prospectus exemptions. In the United States, the Notes are being offered solely to qualified institutional buyers under Rule 144A of the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”), and may also be sold to investors outside of the United States in accordance with Regulation S of the U.S. Securities Act. These private placements are structured to ensure compliance with the securities laws of each jurisdiction in which the Notes are offered.
It is important to note that this announcement does not constitute an offer to sell, nor the solicitation of an offer to buy, the Notes. There will be no offer or sale of the Notes in any jurisdiction where such an offer, solicitation, or sale would be illegal. As part of its efforts to ensure compliance with all applicable securities regulations, ATS is carefully following the legal requirements governing the sale and distribution of the Notes.
By upsizing the offering from its initial $150 million target to $200 million, ATS demonstrates its ability to attract significant investor interest and to take advantage of favorable market conditions. The company’s decision to use the net proceeds to pay down its credit facility aligns with its strategy of maintaining a conservative financial profile while positioning itself for long-term growth.
For ATS, the issuance of these senior unsecured notes represents a key component of its capital management strategy. With the upsizing of the offering, ATS has the flexibility to manage its debt load effectively, ensuring it can continue to fund its operations, expand its business, and deliver value to shareholders. This move is consistent with the company’s commitment to financial prudence and long-term stability.
In conclusion, ATS’s upsized offering of $200 million in senior unsecured notes due 2032 is an important step in strengthening its balance sheet and optimizing its capital structure. With the expected closing date of December 19, 2024, the company is poised to take advantage of favorable market conditions and further enhance its liquidity and financial flexibility. The Offering will also allow ATS to reduce its revolving credit facility debt, ensuring that the company remains well-positioned to meet its financial obligations and execute its strategic growth plans.
This news release does not constitute an offer to sell or the solicitation of an offer to buy the Notes, and no offer or sale of the Notes will take place in any jurisdiction where such an offer, solicitation, or sale would be unlawful.
ATS Corporation is a leading provider of automation solutions, offering innovative products and services to a broad range of industries, including aerospace, automotive, and life sciences. The company focuses on driving operational efficiency and delivering superior value to its customers. With a strong commitment to innovation, ATS continues to be a leader in the automation space, providing solutions that enhance productivity and performance.
