Company overview

Novanta Inc. designs and manufactures products that help equipment makers control lasers and precise movement, automate tasks, and perform imaging and surgical procedures. Its customers are mainly original equipment manufacturers, or OEMs, which incorporate Novanta’s products into systems they sell to end users. Novanta sells most products directly through technical sales staff, with some sales through distributors and resellers.

Its two businesses contribute similar amounts of revenue. Automation Enabling Technologies supplies laser and motion-control products used in industrial processing, robotics and medical automation. Medical Solutions supplies technologies for medical equipment and operating rooms, including endoscopic pumps, related disposables and imaging products. This makes Novanta a supplier to both industrial and medical equipment makers, rather than solely a medical-device company.

Sales depend on OEM customers developing and selling systems that use Novanta’s products. Once those products are built into a customer’s system, changing suppliers is generally difficult until the system’s life cycle ends, especially in medical applications. Two medical-market OEM customers contribute a substantial combined share of revenue, but major customers have no obligation to buy minimum quantities. Novanta’s regulated medical devices generally need FDA clearance or approval to be marketed in the U.S., unless exempt, and must meet EU conformity requirements before EU sales.