[8-K] Novanta Inc. Reports Material Event

Rhea-AI Filing Summary

Novanta Inc. (NASDAQ: NOVT) entered into a Fourth Amended & Restated Credit Agreement on 27 June 2025 that replaces its 2019 facility scheduled to mature in March 2027. The new agreement provides an aggregate senior secured credit capacity of approximately US$1.0 billion, broken down into:

• €65.31 million 5-year Euro-denominated term loan
• $75 million 5-year US-dollar term loan
• $850 million 5-year revolving credit facility

The maturity is extended to June 2030, and an uncommitted accordion feature can raise total commitments by an additional $350 million, subject to customary conditions. Interest is set at (i) Base Rate + 0–0.75 ppt or (ii) SOFR/SONIA/EURIBOR + 1.00–1.75 ppt, with pricing tied to the company’s consolidated leverage ratio. A commitment fee applies to unused revolver capacity.

Key financial covenants tested quarterly include: (1) maximum consolidated leverage ratio of 3.5× (step-up to 4.0× for four quarters following qualifying acquisitions >= $50 million) and (2) minimum fixed-charge coverage ratio of 1.25×. The facilities are secured by senior liens on substantially all assets of Novanta and certain subsidiaries and contain customary negative covenants on mergers, asset sales, indebtedness, investments and liens.

Required quarterly principal amortization begins September 2025 for the Euro term loan and September 2026 for the US term loan, with final balloon payments due at maturity. Prepayments from asset sales, casualty events or incremental debt are mandatory, while voluntary prepayments and commitment reductions are permitted without premium.

Outstanding borrowings under the prior facility were $392.4 million as of 28 March 2025. The new structure enhances liquidity headroom, extends tenor, and provides interest-rate optionality, but also secures the debt and maintains leverage limits that investors should monitor.

Positive

• Extended maturity from March 2027 to June 2030, reducing refinancing risk.
• Increased total committed capacity to approximately US$1.0 billion plus US$350 million accordion, enhancing liquidity and strategic flexibility.
• Leverage-linked pricing allows potential interest savings if leverage remains low.
• Customary but manageable covenants (3.5× max leverage, 1.25× FCCR) preserve operating headroom.

Negative

• Debt remains secured by substantially all assets, increasing encumbrance and priority ahead of equity.
• Potential leverage step-up to 4.0× after sizeable acquisitions could heighten financial risk.
• Commitment fee on unused revolver adds carrying cost even when undrawn.

Insights

Credit Analyst

TL;DR: Novanta upsizes and extends credit lines to 2030, boosting liquidity by ~US$600 m while retaining moderate leverage covenants—credit-positive.

The replacement of the 2019 facility with a US$1 billion package materially lengthens debt tenor (3-year extension) and almost triples available revolver capacity, improving short-term liquidity and funding flexibility for M&A or capex. Pricing—up to SOFR + 1.75 ppt—sits within typical BB-level spreads and is leverage-linked, incentivising deleveraging. Financial maintenance covenants set at 3.5× (4.0× post-deal) provide cushion versus the Q1-25 leverage of ~2× (not disclosed here but historical range). Security on assets adds lender protection but limits asset-based flexibility. Overall, the transaction is credit-positive due to extended maturity, accordion option, and unchanged covenant headroom.

Portfolio Manager

TL;DR: Facility grants US$1 bn fire-power to 2030; beneficial for growth strategy but increases secured claims ahead of shareholders.

From an equityholder viewpoint, the enlarged revolver and accordion create capacity for bolt-on acquisitions—core to Novanta’s growth model—and remove near-term refinancing risk. Interest cost looks manageable, and voluntary prepayment flexibility offers room to de-lever if cash generation permits. However, granting senior liens subordinates existing unsecured creditors and could slightly elevate financial risk if the company draws heavily. The leverage step-up to 4× after large deals signals willingness to lever for M&A. Net effect is moderately positive given liquidity benefits outweigh the incremental secured layer.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 27, 2025

NOVANTA INC.

(Exact name of registrant as specified in is charter)

New Brunswick, Canada	001-35083	98-0110412
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
125 Middlesex Turnpike Bedford, Massachusetts		01730
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (781) 266-5700

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common shares, no par value		NOVT		Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01 Entry into a Material Definitive Agreement.

On June 27, 2025, Novanta Inc. (the “Company”), Novanta Corporation (the “Lead Borrower”) Novanta UK Investments Holding Limited (the “U.K. Borrower”), Novanta Europe GmbH (the “German Borrower” and, together with the Company, the Lead Borrower and the U.K. Borrower, the “Borrowers”) entered into the Fourth Amended and Restated Credit Agreement (the “Agreement”) with Bank of America, N.A., as Administrative Agent, Swing Line Lender, L/C Issuer and lender, BofA Securities, Inc., as joint lead arranger and joint book runner, JP Morgan Chase Bank, N.A., as joint lead arranger, joint book runner, co-syndication agent and lender, Wells Fargo Securities LLC, as joint lead arranger and joint book runner, Wells Fargo Bank, National Association, as co-syndication agent and lender, PNC Capital Markets LLC, as joint lead arranger and joint book runner, PNC Bank, National Association, as co-syndication agent and lender, U.S. Bank National Association, as joint lead arranger and co-syndication agent, Silicon Valley Bank, a Division of First Citizens Bank & Trust Company, as documentation agent and lender, Citibank N.A. as lender, and the other parties thereto.

The Agreement amends and restates, in its entirety, the Third Amended and Restated Credit Agreement dated as of December 31, 2019 (as amended from time to time and in effect immediately prior to the effectiveness of the Agreement) among the Company, the other Borrowers, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer and the other parties thereto (the “Existing Credit Agreement”). The Existing Credit Agreement was scheduled to mature in March 2027. Outstanding borrowings under the Existing Credit Agreement were $392.4 million as of March 28, 2025, the end of the Company’s first fiscal quarter of 2025.

The Agreement provides for an aggregate credit facility of approximately $1.0 billion, comprised of a €65.31 million euro-denominated 5-year term loan facility (the “Euro Term Loans”), a $75.0 million U.S. dollar denominated 5-year term loan facility (the “U.S. Term Loans”), and an $850.0 million 5-year revolving credit facility (the “Revolving Facility”, and together with the Euro Term Loans and the U.S. Term Loans, collectively, the “Senior Credit Facilities”). The Senior Credit Facilities mature in June 2030 and include an uncommitted “accordion” feature pursuant to which the commitments thereunder may be increased by an additional $350.0 million in aggregate, subject to the satisfaction of certain customary conditions.

Loans under the Agreement bear interest at the Base Rate (as defined in the Agreement) plus a margin ranging between zero and 0.75% per annum, determined by reference to the Company’s consolidated leverage ratio, or SOFR, SONIA or EURIBOR, as applicable, plus a margin ranging between 1.00% and 1.75% per annum, determined by reference to the Company’s consolidated leverage ratio. In addition, the Company is obligated to pay a commitment fee on the unused portion of the Revolving Facility.

The Agreement contains various customary representations, warranties and covenants applicable to the Company and its subsidiaries, including, among others: (i) limitations on fundamental changes involving the Company and its subsidiaries; (ii) limitations on the disposition of assets; and (iii) limitations on indebtedness, investments, and liens. The Agreement also requires the Company to satisfy certain financial maintenance covenants on a quarterly basis, including maintaining a minimum consolidated fixed charge coverage ratio of 1.25:1.00 and a maximum consolidated leverage ratio of 3.50:1.00, with a step up to 4.00:1.00 for the four consecutive quarters following certain acquisitions with an aggregate consideration greater than or equal to $50.0 million.

The obligations of the Company under the Senior Credit Facilities are secured on a senior basis by a lien on substantially all of the assets of the Company and certain of its subsidiaries. The Agreement also contains customary events of default.

The term loan facilities require quarterly scheduled principal repayments beginning in September 2025 (with respect to the Euro Term Loans) or September 2026 (with respect the U.S. Term Loans), with the remaining principal balance of the term loans due on June 27, 2030, if the maturity date of the term loan facility is not otherwise extended. Subject to certain exceptions, the Company will be required to prepay outstanding loans under the Agreement with the net proceeds of certain asset dispositions and casualty events and incurrences of certain debt. The Company may voluntarily prepay loans or reduce commitments under the Senior Credit Facilities, in whole or in part, without premium or penalty, subject to certain minimum principal amounts.

The foregoing summary of the terms of the Agreement does not purport to be complete and is qualified in its entirety by reference to the provisions of the Agreement, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.1 and is incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item 1.01 in connection with the Agreement is incorporated in this Item 2.03 by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number		Description
10.1		Fourth Amended and Restated Credit Agreement, dated as of June 27, 2025, by and among the Company, Novanta Corporation, Novanta UK Investments Holding Limited, Novanta Europe GmbH, Bank of America, N.A., as Administrative Agent, Swing Line Lender, L/C Issuer and lender, BofA Securities, Inc., as joint lead arranger and joint book runner, JP Morgan Chase Bank, N.A., as joint lead arranger, joint book runner, co-syndication agent and lender, Wells Fargo Securities LLC, as joint lead arranger and joint book runner, Wells Fargo Bank, National Association, as co-syndication agent and lender, PNC Capital Markets LLC, as joint lead arranger and joint book runner, PNC Bank, National Association, as co-syndication agent and lender, U.S. Bank National Association, as joint lead arranger and co-syndication agent, Silicon Valley Bank, a Division of First Citizens Bank & Trust Company, as documentation agent and lender, Citibank N.A. as lender, and the other parties thereto. (Pursuant to Item 601(a)(5) of Regulation S-K, certain schedules and exhibits have been omitted. The registrant hereby agrees to furnish supplementally a copy of any omitted schedule and exhibit to the Securities and Exchange Commission upon request.)
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		Novanta Inc.
Date: July 2, 2025		By:	/s/ Robert J. Buckley
			Robert J. Buckley
			Chief Financial Officer

FAQ

How large is Novanta's new credit facility announced in the June 27 2025 8-K?

The agreement provides roughly US$1.0 billion in committed capacity: €65.31 m term loan, $75 m term loan and an $850 m revolver.

When do the new senior credit facilities mature?

All tranches mature on 27 June 2030, extending the prior 2027 maturity by three years.

What are the key financial covenants under Novanta's new agreement?

Quarterly tests require a maximum consolidated leverage ratio of 3.5× (4.0× post-acquisition) and a minimum fixed-charge coverage ratio of 1.25×.

What interest rates apply to borrowings under the facility?

Loans bear Base Rate + 0–0.75 % or SOFR/SONIA/EURIBOR + 1.00–1.75 %, depending on the company's leverage tier.

Does the agreement allow Novanta to increase borrowings further?

Yes. An uncommitted accordion feature permits up to an additional $350 million in aggregate commitments, subject to conditions.