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KION Group acquires Dematic for $2.1bn

KION Group acquires Dematic for $2.1bn

The KION Group AG - one of the largest global suppliers of fork lift trucks, warehouse equipment and related services - has acquired Dematic, a best-in-class automation provider and specialist in supply chain optimisation.

KION agreed with funds managed by AEA Investors and Ontario Teachers' Pension Plan as the sellers on this landmark transaction to create a true global provider with close to 30,000 employees and more than €6.7bn in revenue for the calendar year 2015.

After deductions for certain liabilities, KION expects the purchase price for the shares to amount to approximately $2.1bn, based on an enterprise value of Dematic of $3.25bn. The transaction is subject to customary closing conditions and regulatory approvals and is expected to be closed in the course of the fourth quarter of 2016.

Dematic is a leading global supplier of advanced integrated automation technology, software and services to optimise supply chains and to meet the material handling automation needs of its customers.

The company's product and systems portfolio ranges from Automated Guided Vehicles (AGVs), palletisers, storage and picking equipment including automated storage and retrieval systems, sorters and conveyors to a leading integrated software platform and automation technologies.

Dematic has been growing annually by more than 12% since 2013. It generated approximately $1.8bn in revenue and achieved an adjusted EBIT of $66m during the calendar year 2015. Dematic employs almost 6,000 skilled logistics professionals – including over 3,000 engineers in software development, R&D, engineering, project management and customer service – to support its customers globally, with engineering centres and manufacturing facilities located around the globe.

With more than 100 locations, Dematic is present in 22 countries. The company is a leading player in the USA, Europe, and worldwide. Dematic has implemented more than 4,500 integrated systems for small, medium and large companies with business in a broad variety of industries around the globe including the fast-growing e-commerce business.

The purchase of Dematic will establish the KION Group as a global leader in Intralogistics 4.0. Leveraging its sales and service networks, technologies and resources, the enlarged company will be able to seamlessly offer the full material handling product and service offering to customers of all sizes in a broad range of industries across the world.

This most comprehensive material handling solutions offering in the market ranges from manually operated industrial trucks to complete fully automated warehouses. The KION Group will thus enhance its position as one-stop-supplier for intelligent supply chain and automation solutions and is now perfectly positioned for attractive and profitable growth driven by megatrends like Industry 4.0, digitalisation and e-commerce.

Both companies contribute strong complementary market positions and geographical footprint as an opportunity for revenue growth. Dematic will leverage the KION Group's service network and brand reputation in key markets like Europe, China and Brazil, whereas the KION Group will take advantage of Dematic's strong position in the US and European automation markets in particular.

This complementarity is also the source of cost synergies from this combination. KION Group's strong sales and service network together with Dematic's sizeable installed base provides the basis for unlocking further revenue potential from services and systems upgrades.

"This transaction will be transformational to our industry," said KION Group's CEO Gordon Riske. "KION Group and Dematic together will design and deliver solutions that better position our customers to respond to dynamic demand," said Ulf Henriksson, CEO of Dematic.

"With a shared vision and commitment to R&D, the combined company will continue to focus on superior customer solutions with significant investment in this area. Together, KION Group and Dematic will jointly define a new era in material handling solutions."

"The entire KION Group Supervisory Board is excited about the combination of KION Group and Dematic and is fully supportive of this landmark transaction. This marks another milestone in the implementation of the KION Group Strategy 2020," said John Feldmann, Chairman of the KION Group Supervisory Board.

"Together KION Group and Dematic will be even better able to offer their customers worldwide the best suiting products and solutions available on the market."

After closing of the transaction, Dematic will be integrated into the KION Group forming an additional fifth operating unit, which will also comprise the businesses of Egemin Automation and Retrotech. This future KION Group operating unit will be headed by Ulf Henriksson as its President.

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