Brooks Automation buying Crossing Automation

October 30, 2012 – Brooks Automation (NASDAQ: BRKS) says it has agreed to acquire privately-held Crossing Automation for $63 million. The deal is expected to close by the end of this month — meaning October, apparently, given the timing of the Oct. 29 announcement.

Crossing Automation tallied revenues of about $51M in the 12-month period ending Sept. 30. That’s about a tenth the size of Brooks, which had $400M in sales through its first three fiscal quarters ending in June and projects another $112-$119M in the September quarter. Crossing Automation’s gross margins are a bit better, though, at approximately 41% for the trailing 12-month period to Brooks’ 33% in the June quarter.

Steve Schwartz, president & CEO of Brooks, explained that Crossing Automation’s products are "complementary to Brooks," particularly additive in atmospheric automation, and "a significant proportion" of the firm’s revenues to end users will diversify Brooks’ customer base. "Crossing’s leading linear atmospheric solutions combined with Brooks’ existing systems will allow us to develop best of breed systems that address our customers’ cost and productivity requirements," he noted.

Intel Capital also gives the deal a thumbs-up; it said it invested in Crossing Automation in 2005 and has continued to provide "financial support and strategic and operational planning guidance."

As with any M&A, there will be some attrition. Schwartz pledged to "maximize the technical capabilities of the combined companies while generating significant cost synergies through the integration process." He said the deal should achieve "meaningful accretion" starting in fiscal 2013.

This deal is a closure of sorts in the semiconductor manufacturing subsystems arena. In 2009 Crossing Automation acquired Asyst Technologies’ atmospheric wafer handling and automation assets. Brooks and Asyst were longtime competitors in semiconductor automation technologies, since Brooks bought PRI Automation in 2001.

Brooks Automation has been busy with transactions in the past year. Barely a month ago it announced a 10% workforce reduction and downsized a life sciences operation in Switzerland, moves aimed at saving $11M annually, and eighteen months ago it sold its contract manufacturing business to Celestica. On the life sciences side of the business, however, Brooks bought assets from Cyntellect , and bought Nexus Biosystems in July 2011.


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