Dematic sells to German company for $2.1B
A German supplier of automated material handling equipment and software to the logistics industry has signed an agreement to acquire Dematic for $2.1 billion.
KION Group of Wiesbaden, Germany said today that it is acquiring Dematic, a maker of logistics equipment and software, which has its U.S. headquarters in Grand Rapids and its global headquarters in Atlanta.
The selling price is "based on an enterprise value" of Dematic of $3.25 billion.
Dematic is owned by AEA Investors and Ontario Teachers' Pension Plan.
The transaction is subject to customary closing conditions and regulatory approvals and expected to close in the fourth quarter of 2016.
Dematic will be integrated into a fifth operating unit of KION Group, which will also comprise the businesses of Egemin Automation and Retrotech, purchased by KION Group in the past year.
Ulf Henriksson, CEO of Dematic, will serve as president of the operating unit.
The deal will make KION Group one of the “leading global providers of intelligent intra-logistics solutions.”
KION Group will be able to serve customers with products that run the gamut from manually operated industrial trucks, including forklifts and warehouse trucks, to "fully automated warehouses."
Dematic has been growing annually by more than 12 percent since 2013, according to KION Group. It generated about $1.8 billion in revenue and achieved an adjusted EBIT of $166 million during the 2015 calendar year.
Dematic’s portfolio features automated guided vehicles, or AGVs, palletizers, storage and picking equipment, including automated storage and retrieval systems, sorters and conveyors, and an integrated software platform and automation technologies.
The company employs more than 900 workers in Grand Rapids and nearly 6,000 logistics professionals globally.
It has engineering centers and manufacturing facilities located in 22 countries around the globe.
KION Group is present in more than 100 countries and in 2015, employed around 23,500 people and generated revenue of around €5.1 billion.
The company is comprised of seven brands: Linde, STILL, Fenwick, OM STILL, Baoli, Voltas and Egemin Automation.
The purchase of Dematic will introduce new offerings into KION Group’s portfolio.
"With the acquisition of Dematic, we are substantially changing and enhancing what KION Group is and does — for further profitable growth in a quickly changing industry and digitalized world," KION Group CEO Gordon Riske said.
He said the company is becoming a “unique provider” of products, services and solutions.
“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 mega-trends like Industry 4.0, digitalization and ecommerce,” the company said.
KION Group already started to build up a position as provider of automated systems solutions by acquiring Egemin Automation and Retrotech this past year.
Dematic's Henriksson said the transaction will be “transformational to our industry.”
“KION Group and Dematic together will design and deliver solutions that better position our customers to respond to dynamic demand,” he said.
Both companies contribute complementary market positions and geographical footprints as an opportunity for revenue growth.
Dematic will leverage KION Group's service network and brand reputation in key markets like Europe, China and Brazil, and KION Group will take advantage of Dematic’s position in the U.S. and European automation markets.
KION Group's sales and service network and Dematic’s "sizeable installed base" will provide "the basis for unlocking further revenue potential from services and systems upgrades.”
KOIN Group also said there’s an opportunity for cost synergies from the acquisition.