NOVANTA INC

Previous wording

As part of our business strategy, we expect to broaden our product and service offerings by acquiring businesses, technologies, assets and product lines that, we believe, complement or expand our existing businesses. We may have difficulty finding acquisition opportunities, or if we do identify these opportunities, we may not be able to complete the transactions for various reasons, including a failure to secure financing on acceptable terms. In recent years, we have made a number of acquisitions, including the acquisitions of Keonn Technologies, S.L., Motion Solutions Parent Corp., MPH Medical Devices S.R.O., ATI Industrial Automation, Inc., Schneider Electric Motion USA, Inc., and, in July 2026, Riverpoint Medical, and we expect to continue to make acquisitions in the future. Our acquisition of Riverpoint Medical, for upfront cash consideration of $1.2 billion and a milestone payment of $250 million payable on or before January 8, 2027, is substantially larger than our other recent acquisitions, and the risks described in this risk factor are heightened with respect to this acquisition given its size and the resources required to integrate it successfully. We may fail to successfully integrate acquired businesses, products, technologies or personnel into our businesses and, as a result, may fail to realize the synergies, cost savings and other benefits expected from the acquisitions. If we are not able to successfully achieve these objectives, the anticipated benefits of such acquisitions may not be realized fully or at all, and our results of operations could be adversely affected. If we consummate multiple acquisitions in a relatively short amount of time, these risks will be heightened due to limited resources available to integrate these new businesses. Our acquisition activities may divert management’s attention from our regular operations. Managing a larger and more geographically dispersed operation and product portfolio could also pose challenges for our management team.

Current wording

As part of our business strategy, we expect to broaden our product and service offerings by acquiring businesses, technologies, assets and product lines that, we believe, complement or expand our existing businesses. We may have difficulty finding acquisition opportunities, or if we do identify these opportunities, we may not be able to complete the transactions for various reasons, including a failure to secure financing on acceptable terms. In recent years, we have made a number of acquisitions, including the acquisitions of Keonn Technologies, S.L., Motion Solutions Parent Corp., MPH Medical Devices S.R.O., ATI Industrial Automation, Inc., Schneider Electric Motion USA, Inc., and, in July 2026, Riverpoint Medical, and we expect to continue to make acquisitions in the future. Our acquisition of Riverpoint Medical, for upfront cash consideration of $1,200.6 million, net of cash acquired, and a milestone payment of $250.0 million payable on or before January 8, 2027, is substantially larger than our other recent acquisitions, and the risks described in this risk factor are heightened with respect to this acquisition given its size and the resources required to integrate it successfully. We may fail to successfully integrate acquired businesses, products, technologies or personnel into our businesses and, as a result, may fail to realize the synergies, cost savings and other benefits expected from the acquisitions. If we are not able to successfully achieve these objectives, the anticipated benefits of such acquisitions may not be realized fully or at all, and our results of operations could be adversely affected. If we consummate multiple acquisitions in a relatively short amount of time, these risks will be heightened due to limited resources available to integrate these new businesses. Our acquisition activities may divert management’s attention from our regular operations. Managing a larger and more geographically dispersed operation and product portfolio could also pose challenges for our management team.

Previous wording

The production of our products requires a wide variety of raw materials, key components and other goods that are generally available from alternate sources of supply. However, certain critical raw materials, key components and other goods required for the production of some of our principal products are available from limited or a single source of supply. Certain single source suppliers of key components for us could decide to stop producing some of these components. If we fail to find alternative sources, redesign our products or otherwise manage this transition effectively, our business would be adversely impacted. If we experience delays in receiving materials from certain of our key limited or single source suppliers, our relationship with customers may be harmed if such delays cause us to miss our scheduled shipment deadlines for customers and our business could be adversely affected. If suppliers or subcontractors experience difficulties or fail to meet our manufacturing requirements, our business would be harmed until we are able to secure alternative sources, if any, on commercially reasonable terms. A prolonged inability to obtain or increase in the prices of certain raw materials, key components or other goods is possible and could have a significant adverse effect on our business operations, damage our relationships with customers, or even lead to permanent loss of customer orders.

Current wording

The production of our products requires a wide variety of raw materials, key components and other goods that are generally available from alternate sources of supply. However, certain critical raw materials, key components and other goods required for the production of some of our principal products are available from limited or a single source of supply. Certain single source suppliers of key components for us could decide to stop producing some of these components. We have experienced, and may in the future experience, delays or disruptions in supply from third-parties due to government intervention. If we fail to find alternative sources, redesign our products or otherwise manage this transition effectively, our business would be adversely impacted. If we experience delays in receiving materials from certain of our key limited or single source suppliers, our relationship with customers may be harmed if such delays cause us to miss our scheduled shipment deadlines for customers and our business could be adversely affected. If suppliers or subcontractors experience difficulties or fail to meet our manufacturing requirements, our business would be harmed until we are able to secure alternative sources, if any, on commercially reasonable terms. A prolonged inability to obtain or increase in the prices of certain raw materials, key components or other goods is possible and could have a significant adverse effect on our business operations, damage our relationships with customers, or even lead to permanent loss of customer orders.

Previous wording

For example, certain products within our Precision Manufacturing and Robotics and Automation businesses use rare-earth materials sourced from suppliers in China, the export of which requires a license from the Chinese government. For several months, we have sought but have been unable to obtain the licenses necessary to receive certain shipments of these materials, which has caused delays in fulfilling customer orders and increases in certain manufacturing costs. If we are unable to obtain the necessary export licenses on a timely basis or at all, or if similar restrictions are imposed on other raw materials or components, our ability to fulfill customer orders and our manufacturing costs could be further adversely affected.

Current wording

For example, certain products within our Precision Manufacturing and Robotics and Automation businesses use rare-earth materials sourced from suppliers in China and magnets manufactured with such materials, the export of which requires a license from the Chinese government. For several months, we have sought but have been unable to obtain the licenses necessary to receive certain shipments of these materials, which has caused delays in fulfilling customer orders and increases in certain manufacturing costs. If we are unable to obtain the necessary export licenses on a timely basis or at all, or if similar restrictions are imposed on other raw materials or components, our ability to fulfill customer orders and our manufacturing costs could be further adversely affected.

Previous wording

As of December 31, 2025, we had $828.1 million of net intangible assets, including goodwill, on our consolidated balance sheet. Net intangible assets consist principally of goodwill, customer relationships, patents, trademarks, tradenames, and core technologies. Goodwill and indefinite-lived intangible assets are tested for impairment at least on an annual basis. All other intangible assets are evaluated for impairment should discrete events occur that call into question the recoverability of the intangible assets.

Current wording

As of October 2, 2026, we had $2,325.9 million of net intangible assets, including goodwill, on our consolidated balance sheet, representing approximately 73% of our total assets. Net intangible assets consist principally of goodwill, customer relationships, patents, trademarks, trade names, and core technologies. Goodwill and indefinite-lived intangible assets are tested for impairment at least annually. All other intangible assets are evaluated for impairment when events or changes in circumstances indicate that their carrying amounts may not be recoverable.

Previous wording

In July 2026, we completed our acquisition of Riverpoint Medical for upfront cash consideration of $1.2 billion, which we expect will result in a substantial increase in our goodwill and other intangible assets. As a result, our exposure to potential future impairment charges has increased, and any failure to achieve the anticipated growth or synergies from this acquisition could result in an impairment of the associated goodwill or other intangible assets, which could adversely affect our results of operations.

Current wording

In July 2026, we completed our acquisition of Riverpoint Medical for upfront cash consideration of $1,200.6 million, net of cash acquired, which substantially increased our goodwill and other intangible assets. The Riverpoint Medical acquisition accounts for all of the increase in our net intangible assets since December 31, 2025. As a result, our exposure to potential future impairment charges has increased, and any failure to achieve the anticipated growth or synergies from this acquisition could result in an impairment of the associated goodwill or other intangible assets, which could adversely affect our results of operations.

Previous wording

As of December 31, 2025, we had outstanding debt of $149.0 million under our fourth amended and restated senior secured credit agreement (as amended, the “Fourth Amended and Restated Credit Agreement”), $850.0 million of additional borrowing capacity available under the revolving credit facility, and $110.6 million outstanding under the senior amortizing notes (the “Amortizing Notes”) component of our 6.50% tangible equity units (“Units”). In connection with our acquisition of Riverpoint Medical in July 2026, we amended our Fourth Amended and Restated Credit Agreement to permit additional borrowings and borrowed approximately $616.0 million to fund a portion of the purchase price, resulting in additional borrowing capacity under our revolving credit facility of approximately $434.0 million as of July 23, 2026. If we are unable to satisfy the conditions in the Fourth Amended and Restated Credit Agreement or our needs exceed the amounts available under the revolving credit facility, we may need to obtain equity or debt financing. If we raise additional funds through further issuances of equity or convertible debt securities, our existing shareholders could suffer significant dilution. Any new equity securities we issue could have rights, preferences and privileges superior to those of the holders of our common shares. Further, our Fourth Amended and Restated Credit Agreement restricts our ability to obtain additional debt financing from other sources. If we are unable to obtain adequate financing or obtain financing on terms satisfactory to us when we need it, our ability to continue to support our business growth and to respond to business challenges could be significantly limited. In addition, the terms of any additional equity or debt issuances may adversely affect the value and price of our common shares.

Current wording

As of December 31, 2025, we had outstanding debt of $149.0 million under our fourth amended and restated senior secured credit agreement (as amended to date, the “Fourth Amended and Restated Credit Agreement”), $850.0 million of additional borrowing capacity available under the revolving credit facility, and $110.6 million outstanding under the senior amortizing notes (the “Amortizing Notes”) component of our 6.50% tangible equity units (“Units”). In connection with our acquisition of Riverpoint Medical in July 2026, we amended our Fourth Amended and Restated Credit Agreement to permit additional borrowings to fund a portion of the acquisition. As of October 2, 2026 we had outstanding debt of $753.0 million under the Fourth Amended and Restated Credit Agreement. If we are unable to satisfy the conditions in the Fourth Amended and Restated Credit Agreement or our needs exceed the amounts available under the revolving credit facility, we may need to obtain equity or debt financing. If we raise additional funds through further issuances of equity or convertible debt securities, our existing shareholders could suffer significant dilution. Any new equity securities we issue could have rights, preferences and privileges superior to those of the holders of our common shares. Further, our Fourth Amended and Restated Credit Agreement restricts our ability to obtain additional debt financing from other sources. If we are unable to obtain adequate financing or obtain financing on terms satisfactory to us when we need it, our ability to continue to support our business growth and to respond to business challenges could be significantly limited. In addition, the terms of any additional equity or debt issuances may adversely affect the value and price of our common shares.

Previous wording

In June 2026, we entered into a securities purchase agreement for a private placement of approximately 2,142,857 of our common shares at a purchase price of $140.00 per share, resulting in gross proceeds of approximately $300 million, a portion of which we used to fund our acquisition of Riverpoint Medical. Because these shares were sold in an unregistered transaction under Section 4(a)(2) of the Securities Act, we agreed under a registration rights agreement to register their resale. Sales of these shares in the public market following such registration, or the perception that such sales could occur, could depress the market price of our common shares.

Current wording

In June 2026, we entered into a securities purchase agreement for a private placement of 2,142,857 of our common shares at a purchase price of $140.00 per share, resulting in gross proceeds of approximately $300 million, a portion of which we used to fund our acquisition of Riverpoint Medical. Because these shares were sold in an unregistered transaction under Section 4(a)(2) of the Securities Act, we agreed under a registration rights agreement to register, and have since registered, their resale. Sales of these shares in the public market following such registration, or the perception that such sales could occur, could depress the market price of our common shares.

Previous wording

In connection with our acquisition of Riverpoint Medical in July 2026, we amended our Fourth Amended and Restated Credit Agreement to permit additional borrowings and borrowed approximately $616.0 million to fund a portion of the purchase price, increasing our total consolidated debt to approximately $854.8 million. This increased level of indebtedness heightens the risks described above, including our vulnerability to adverse changes in our business and the general economic environment and our exposure to increases in interest rates on our variable rate indebtedness.

Current wording

In connection with our acquisition of Riverpoint Medical in July 2026, we amended our Fourth Amended and Restated Credit Agreement to permit additional borrowings and borrowed approximately $616.0 million to fund a portion of the purchase price. As of October 2, 2026 we had $838.6 million of total outstanding debt. This increased level of indebtedness heightens the risks described above, including our vulnerability to adverse changes in our business and the general economic environment and our exposure to increases in interest rates on our variable rate indebtedness.