Kion buys Dematic in 'transformational' £1.4bn deal

The deal aims to position the KION Group as a global leader in Intralogistics 4.0 and take it closer to its 2020 strategy aim of significantly closing the gap between itself and global material handling leader Toyota Industries.

The combined firm will have around 30,000 employees and had approximately €6.7 billion (£5.15bn) in revenue for the calendar year 2015. The transaction is expected to close in Q416.

KION expects the purchase price for the shares to amount to approximately $2.1bn (£1.4bn), based on an enterprise value of Dematic of $3.25bn.

KION Group is now a one stop shop supplier from simple pallet trucks to the largest and most complex automated warehousing projects.

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 KION will take advantage from Dematic’s strong position in the US and European automation markets in particular.

The complementary nature of the companies is also expected to produce cost synergies.

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 Dematic CEO Ulf Henriksson as its president.

"With the acquisition of Dematic we are substantially changing and enhancing what KION is and does – for further profitable growth in a quickly changing industry and digitalised world," said KION Group's CEO Gordon Riske. “We can accompany every customer seamlessly on his journey to Industry 4.0 and Intralogistics 4.0.”

“This 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,” added Ulf Henriksson, CEO of Dematic.

The deal is part of a trend of large industrial truck and machinery firms targeting automated logistics suppliers for acquisition.

In 2014 Japanese machinery manufacturer Murata Machinery (Muratec) has acquired Cimcorp, with, again, the aim to to create a one stop shop for material handling automation.

Also in 2014, industrial robot manufacturer KUKA bought automaton specialist Swisslog for $357 million (£244m). The companies have since co-operated on logistics robot development.