Novanta (NOVT) investor relations material

Deal rationale and strategic fit

• Expands into high-growth, minimally invasive surgical consumables, doubling recurring medical revenue and deepening OEM partnerships.

• Increases exposure to recurring medical consumables from 15% to 25% of revenue, targeting over 30% by 2030 and shifting portfolio to 60% medical end-markets.

• Adds a $2 billion addressable market, strengthens position in sports medicine and cardiovascular consumables, and leverages Riverpoint's innovation in fiber-based, biomaterial-coated implants.

• Establishes a scalable platform for future bolt-on acquisitions and portfolio expansion in high-growth medtech segments.

• Deepens customer overlap and innovation partnerships, positioning the combined entity as a preferred OEM supplier.

Financial terms and conditions

• Total upfront transaction payment is $1.2 billion, with an additional $250 million milestone payment due in Q1 2027.

• Purchase price represents 19x 2026E adjusted EBITDA (ex-synergies) and 17x (inc. synergies); for 2027, 20x (ex-synergies) and 15x (inc. synergies).

• Funded through cash, existing credit facility, and a $300 million equity raise; pro forma net leverage at close is 2.7x, expected to fall below 2.3x by end of 2027.

• Transaction is immediately accretive to EPS, with 2027 adjusted EPS accretion of $0.18–$0.25.

• Expected to close in Q3 2026, subject to regulatory review and closing conditions.

Synergies and expected cost savings

• Over $80 million in cumulative profit and cash flow synergies expected over five years post-closing.

• Cost-only synergies of $6–8 million in 2027, doubling in 2028, reaching a $20 million annual run rate.

• Major synergy from avoiding a $30 million greenfield investment and leveraging Riverpoint's FDA-registered facilities.

• Additional revenue synergies of $10 million+ anticipated from cross-selling and European expansion.

• Riverpoint expected to generate $80 million Adjusted EBITDA in 2027 including synergies.