The KION Group Acquires Dematic, Creating Global Logistics Powerhouse

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The KION Group Acquires Dematic, Creating Global Logistics Powerhouse

The KION GROUP AG ("KION Group"), one of the two largest suppliers of forklift trucks, warehouse equipment and related services, will become one of the leading global providers of intelligent intralogistics solutions by acquiring Dematic, a best-in-class 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 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 approximately 9.4 percent for this period. After deductions for certain liabilities, the KION Group expects the purchase price for the shares to amount to approximately $2.1 billion, based on an enterprise value of Dematic of $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 an integrated software platform and automation technologies.

Dematic has been growing annually by more than 12 percent since 2013. It generated approximately $1.8 billion in revenue and achieved an adjusted EBIT of $166 million during the calendar year 2015. Dematic employs close to 6,000 skilled logistics professionals – including more than 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. 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.

Global leader in Intralogistics 4.0
The purchase of Dematic is poised to establish the KION Group as a global leader in Intralogistics 4.0. Leveraging its sales and service networks, technologies and resources, the new 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.

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 United States 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.

A unique company in its industry
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 attractive and growing 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.

Solid financing strategy
"KION Group's strong cash flow generation and debt reduction over the last years since the IPO has provided us with the balance sheet strength for such a transformational transaction," said Thomas Toepfer, CFO of the KION Group. "We have solid financing in place to fund the transaction with a prudent mix of equity and debt in line with our conservative financial policy that will maintain our financial profile as a good cross-over credit."