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KION to buy Dematic for USD 3.25b

Kion Dematic
KION GROUP AG, already one of the two largest suppliers of forklift trucks, warehouse equipment and related services with Linde and Baoli, amongst others, will become one of the largest global providers of intelligent intralogistics by acquiring Dematic, an automation provider and specialist in supply chain optimisation.
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 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 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 (AGV), 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 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 people – 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 line-up 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.

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