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ATS buying German automation engineering services provider

CAMBRIDGE – ATS Automation Tooling Systems is buying a large provider of automation engineering services in Germany for $362 million. By Record staff

The Cambridge-based manufacturer of automated production systems said Tuesday it has reached an agreement to buy all of the shares of M+W Process Automation GmbH and ProFocus LLC.

M+W, established 28 years ago and headquartered in Ludwigshafen am Rhein, provides a wide range of engineering services in the field of automation, including consulting, system engineering, integration, process control and life cycle management.

It primarily works with customers in the automotive, pharmaceutical, biotechnology, chemicals, oil and gas and food industries.

M+W employs about 1,000 people, including about 750 engineers. In 2013, it had sales of about 166 million euros, and earnings before interest, taxes, depreciation and amortization (EBITDA) of about 20 million euros.

ATS said the acquisition will significantly enhance its capability, size and scale. It will boost the company’s pro forma revenue to more than $1 billion a year, said chief executive officer Anthony Caputo.

“This transaction is in the bull’s eye of our stated strategy to pursue growth by acquiring capabilities we deem to be strategic,” he said in a conference call with analysts.

Caputo noted that M+W has expertise in the entire automation process, from devices, to machines, to entire factories, to integrating factories with enterprise software systems.

It operates out of 51 locations in 16 countries, usually close to the facilities of its customers. That gives ATS the ability to respond quickly to customers’ needs, said Caputo.

M+W’s complement of 750 engineers effectively gives the company an “embedded technical sales force” that is as big as ATS’s entire current sales force, he said.

ATS, which employs about 2,500 people in 23 manufacturing facilities in Canada, the United States, Europe, Southeast Asia and China, said it expects to complete the acquisition by the end of September, subject to customary conditions, including applicable antitrust approvals.

The company said the acquisition will be funded from a new $600-million credit facility underwritten by the Bank of Nova Scotia and the Toronto-Dominion Bank.

ATS shares jumped $1.12 or 7.45 per cent on Tuesday, closing at $16.16.