KION group completes acquistion of Dematic

November 2, 2016 - Starting a new chapter in the global supply chain industry, the KION Group has completed its acquisition of Dematic, a specialist for automation and supply chain optimization. The KION Group is thus positioned to tap into the growth driven by megatrends such as Industry 4.0, digitalization and e-commerce.

The Dematic operating unit will be led by John Baysore, previously CEO of Dematic North America, who will hold the role of President and Chief Executive Officer and has a proven track record in growing supply chain solutions business. In the newly created role of Executive Vice President International, Jeff Moss will head up Dematic's international business outside North America, which will be a key focus for expansion. The new management team will also include Frank Herzog, previously the KION Group's Head of Corporate Finance, in the role of Executive Vice President Finance and Chief Financial Officer. Business in North America will be the responsibility of Scott Watts, who has been appointed Executive Vice President North America.

As a result of the transaction, the KION Group will start managing its business and reporting financials by three segments in December 2016: Industrial Trucks and Services, Supply Chain Solutions and Corporate Services. The Industrial Trucks and Services segment represents KION's business up to now and consists of four operating units: Linde Material Handling EMEA and STILL EMEA, which each concentrate on Europe, the Middle East and Africa, plus KION APAC and KION Americas, which hold cross-brand responsibility for the Asia-Pacific region and the Americas, respectively. The Supply Chain Solutions segment comprises Dematic, Egemin Automation and Retrotech, while Corporate Services includes headquarter functions and group wide services such as internal logistics and IT.

After the deduction of certain liabilities, the purchase consideration for the shares in Dematic amounts to circa US$ 2.0 billion based on an enterprise value of US$3.25 billion. The acquisition creates a leading player with pro forma revenue of more than €6.7 billion in the 2015 calendar year and a high level of profitability in the form of a combined adjusted EBIT margin of approximately 9.4 percent in the same period.  

Dematic is a global supplier of advanced integrated supply chain automation technology, software and services. Its portfolio of products and systems includes intelligent software, conveyors, sortation, automated guided vehicles, automated storage and retrieval systems, light/voice directed order fulfilment, automated de-palletizing/palletizing and the industry's most robust 24/7/365 customer service offering. Dematic has grown by more than 12 percent annually since 2013. In 2015, it generated revenue of roughly US$1.8 billion (€1.6 billion) and adjusted EBIT of US$166 million (€150 million). Dematic employs almost 6,000 skilled logistics professionals - including more than 3,000 engineers in software development, research and development, engineering services, project management and customer service.

Dematic will make use of the reputation and market positions of KION's forklift brands in key markets such as Europe, China and Brazil, while the KION Group benefits from Dematic's position in the U.S. and European automation markets. This complementarity of both businesses will generate cost synergies. Moreover, the combination of the KION Group's comprehensive sales and service network and Dematic's large installed base opens up potential for further revenue gains in the software, service and retrofit businesses. 

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