KION GROUP announces acquisition of Dematic | Automation.com

KION GROUP announces acquisition of Dematic

KION GROUP announces acquisition of Dematic

June 21, 2016 – The KION GROUP AG ("KION Group") will become a provider of intelligent intralogistics solutions by acquiring Dematic, an automation provider and specialist in supply chain optimization. The KION Group 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, more than € 6.7 billion in revenue for the calendar year 2015 and a strong profitability with a combined adjusted EBIT margin of approx. 9.4 per cent for this period. After deductions for certain liabilities, the KION Group expects the purchase price for the shares to amount to approx. USD 2.1 billion, based on an enterprise value of Dematic of USD 3.25 billion. 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 global supplier of advanced integrated automation technology, software and services to optimize 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), palletizers, 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 per cent since 2013. It generated approx. USD 1.8 billion in revenue and achieved an adjusted EBIT of USD 166 million 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 centers 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 leader in Intralogistics 4.0. Leveraging its sales and service networks, technologies and resources, the enlarged company will be able to offer the full material handling product and service offering to customers of all sizes in a broad range of industries across the world. This material handling solutions offering ranges from manually operated industrial trucks to complete fully automated warehouses. The KION Group will thus enhance its position as supplier for intelligent supply chain and automation solutions and is now positioned for attractive and profitable growth driven by megatrends like Industry 4.0, digitalization and e-commerce.

In the past year, the KION Group already started to build up a strong position as provider of automated systems solutions by acquiring Egemin Automation and Retrotech, thereby making further inroads in this 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.

The transaction will be funded initially with a bridge loan facility of € 3.0 billion which has been firmly committed by a group of KION Group's core relationship banks. KION Group intends to permanently refinance the acquisition through equity, long-term capital markets and bank debt. The equity issuance of up to 10 per cent of new shares would utilize the entire currently existing authorized share capital and is fully supported by KION Group's major shareholder Weichai Power. KION Group is committed to maintaining its position as a strong cross-over credit with reliable access to debt capital markets and would therefore consider the full spectrum of equity-generating instruments in line with its conservative financial policy.

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