STOCKHOLM (Reuters) - Atlas Copco (ATCOa.ST) on Monday made a takeover bid in cash for German vision technology group Isra Vision (ISRG.DE), valuing the company at 1.09 billion euros ($1.19 billion), including debt, expanding the Swedish company’s business in automated manufacturing and quality control.
Atlas Copco, which makes compressors, vacuum pumps and industrial tools, said it would offer 50 euros per Isra Vision share, a premium of 43% to the German company’s closing price on Friday.
The bid is fully supported by Isra Vision’s management board and supervisory board, and Atlas Copco has secured around 35% of the shares via irrevocable undertakings and a share purchase agreement.
Darmstadt-based Isra Vision specializes in surface inspection and 3D vision for robot guidance, quality inspection and metrology. Isra Vision reported a 2018/19 operating profit of around 34 million euros on sales of 154 million.
“This is about strengthening our competitiveness long-term,” Henrik Elmin, head of Atlas Copco’s business area Industrial Technique told Reuters.
“We see that customers want to implement a higher level of automation and quality control on the production lines, and machine vision is a critical technology for that.”
Shares in Atlas Copco, Sweden’s biggest company by market value, were up 0.6% by 0914 GMT, while Isra Vision rose 44.5%.
“This is a strategic entry into digital manufacturing and is a big deal for Atlas even though it doesn’t add much sales and EBIT upfront,” Citi said in a research note.
Elmin said the main focus would be on expanding Isra Vision’s business as its operating margin of 22% was at a good level.
Atlas Copco, which has made a range of acquisitions in assembly technologies in areas such as adhesives bonding - frequently used in the automotive industry - said Isra Vision would become a separate division within the group’s Industrial Technique business area.
“In the future Atlas Copco’s current assembly solutions will need to be combined with a machine vision solution to position the robot or inspect the quality of the process result,” the company said.
Atlas Copco said the ability to offer both technologies and machine vision solutions for the same application would strengthen its position with customers.
Reporting by Johannes Hellstrom; additional reporting by Douglas Busvine in Berlin; editing by Jason Neely and Jane Merriman