Goods testing SGS expands US testing business with major takeover
The goods testing group SGS wants to expand its business in the USA and is making a major acquisition to this end. SGS is buying the North American testing company Applied Technical Services (ATS) with a total of 2100 employees and 85 testing facilities across the continent.
02.07.2025, 07:30
SDA
According to a press release issued on Wednesday, ATS can look back on over 60 years of company history and offers testing solutions and services for factories, the aerospace and defense industries as well as power production and distribution. The company is based in Marietta near Atlanta.
Growth in North America
The acquisition, valued at 1.325 billion dollars, will bring SGS a significant step closer to its goal of strengthening its presence in North America by 2027, said CEO Géraldine Picaud in the press release. The acquisition is a milestone for SGS.
As part of its Strategy 2027, SGS aims to increase Group sales by 6 to 9 percent annually and is aiming to double sales in North America alone compared to 2023. With ATS, the sales level there will rise to over 1.5 billion US dollars, it said.
SGS assumes that the acquisition of ATS can be completed by the end of 2025 or early 2026 at the latest. From 2026, SGS then expects the company to contribute USD 460 million to sales, with an EBITDA contribution of USD 95 million - before synergy effects.
Attractive synergy potential
In terms of synergy potential, SGS is targeting an EBITDA contribution of at least 30 million dollars per year in the first three years after the end of the transaction. And the contribution to the Group's earnings per share will be positive from the first year onwards.
Sales growth and the operating margin are also expected to improve, SGS added. ATS will open up entry into new attractive segments for SGS. In addition, the offerings and customer portfolios of the two companies complement each other well, which offers great cross-selling opportunities, it said.
SGS will finance the acquisition largely with cash and debt. However, a small part of the price of 100 million dollars will be paid in SGS shares to some shareholders and key employees of ATS, with a holding period of three years.
