Novanta Inc. (NASDAQ: NOVT) said it will sell 2,142,857 common shares at $140.00 apiece to institutional and accredited investors in a private placement totaling $300 million, and separately agreed to acquire Riverpoint Medical from Arlington Capital Partners for an upfront cash consideration of $1.2 billion plus a $250 million milestone payment scheduled for the first quarter of 2027. The financing and acquisition announcements coincided with a 6.3% decline in Novanta shares in premarket trading on Tuesday.
The securities purchase agreement calls for the private placement to close on or about June 11, 2026, subject to customary closing conditions. Novanta plans to fund the Riverpoint acquisition using the private placement proceeds in combination with existing cash and its available credit facility. The acquisition itself is expected to close in the third quarter of 2026, subject to regulatory approvals.
Riverpoint Medical develops and manufactures medical devices centered on advanced surgical fibers and related technologies used in minimally invasive procedures across sports medicine, trauma and cardiovascular surgery. Under Novanta's ownership, Riverpoint is projected to generate approximately $80 million in Adjusted EBITDA in 2027.
The upfront purchase price equates to roughly 19 times Riverpoint's estimated 2026 Adjusted EBITDA before synergies, according to Novanta's disclosures. The company also stated that it expects the transaction to be immediately accretive to Adjusted Diluted Earnings Per Share in 2026.
Management anticipates that the deal will double Novanta's recurring medical consumables revenue to about $300 million and increase the company's medical end-market concentration to roughly 60% of total revenue. Revenue for Riverpoint is expected to continue expanding at an annual rate of 12% to 15%.
On balance sheet metrics, Novanta said its net leverage ratio should rise to approximately 2.7x after the close of the transaction, with an expectation that leverage will decline to under 2.3x by the end of 2027. The company confirmed its previously issued second quarter and full year 2026 guidance for the standalone business.
Contextual notes - The private placement is targeted at institutional and accredited investors and is contingent on customary closing conditions. The acquisition includes both an upfront cash payment and a contingent milestone, with the latter due in Q1 2027. Regulatory approvals are a stated condition for the transaction's completion in Q3 2026.