April 21, 2011 – GLOBE NEWSWIRE — Brooks Automation Inc. (Nasdaq:BRKS) entered into a definitive agreement to sell its contract manufacturing business based in Portland, OR to subsidiaries of Toronto, Canada-based Celestica Inc. for approximately $80 million in cash, subject to adjustment based on the working capital at closing. Assuming satisfaction of customary closing conditions, BRKS anticipates the closing of this transaction within the current fiscal quarter.
"The contract manufacturing business had stand-alone revenues of approximately $135 million for the six months ended March 31, 2011. Approximately $40 million of these revenues were either for component products that will continue to be supplied by Brooks after this transaction or for subsystems that the contract manufacturing operations will continue to produce for Brooks. Thus Brooks would have reported a reduction in revenues without the contract manufacturing operations of approximately $95 million for the six months ended March 31, 2011," said Martin S. Headley, EVP and CFO of Brooks.
BRKS indicated that the gain on sale of the contract manufacturing operations is expected to be between $42 and $46 million.
Brooks Automation is moving its focus onto technology-driven revenues in the controlled temperature and pressure environments sector, said Dr. Steve Schwartz, president and CEO of Brooks. "We plan to use the cash generated from this transaction in the initiatives that will leverage our existing technology capabilities, particularly into market sectors other than wafer frontend semiconductor capital equipment," he added.
"Brooks estimates that Net Income would have been reduced by approximately $8.0 million for the six months ended March 31, 2011 if this divestiture had occurred before the current fiscal year. Management anticipates that continuing growth initiatives will rapidly offset a proportion of this impact," added Headley.
"Without the contract manufacturing business and including the benefit of the continuing commerce with that business, the core technology and service businesses of Brooks would have reported gross margins of approximately 38% for the six months ended March 31, 2011," he said.
GCA Savvian served as the financial advisor on this transaction and Needham & Company provided a fairness opinion to the board of directors.
In conjunction with the announcement of the sale of the contract manufacturing business, the Company provided an update on current financial performance and indicated that revenues for the Company’s second quarter of fiscal 2011 ended on March 31, 2011 are expected to be between $192 and $193 million. This compares with revenue guidance previously provided for the quarter of at least $185 million. Based on the stronger revenue and margin performance, the Company now expects diluted earnings per share for the quarter just ended of between $0.40 and $0.42 as compared to previous guidance of between $0.33 and $0.37.
Brooks management advised that their regular earnings call to discuss the final quarterly results in detail will be held after the close of markets on Thursday, May 5, 2011.
The Company also announced that on April 1, 2011 it completed the acquisition of RTS Life Sciences, a UK based provider of automation solutions to Life Sciences markets. "The RTS acquisition represents the first small step in a broader strategy to leverage the capabilities of Brooks into Life Science Systems markets," noted Dr. Schwartz. The Company disclosed a purchase price of approximately $3.3 million, net of cash on hand, for this business.
Brooks provides automation, vacuum, and instrumentation products and services. For more information go to www.brooks.com.
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