German forklift truck and robotics maker Kion (KGX.DE) has agreed to buy Dematic from AEA Investors and Ontario Teachers’ Pension Plan to expand into the market for automated warehouses and supply chains that have ballooned with the growth of e-commerce.
Excluding certain liabilities, the purchase price will be about US$2.1 billion, Kion said on Tuesday.
The takeover offer values Atlanta, Georgia-based Dematic at US$3.25 billion and creates a group with close to 30,000 employees and more than 6.7 billion euros (US$7.6 billion) in annual sales.
The takeover will allow Kion to combine its industrial forklift trucks systems with Dematic’s fully automated warehouses to become a one-stop supplier for retailers and logistics companies.
Kion sees growth opportunities in China and North America and plans to finance the transaction with a 3 billion-euro bridge loan, which it will refinance with a combination of equity from a capital increase, long-term capital markets debt and bank loans.
Due to the spread of online sales and the expectation of faster delivery times, the market for supply chain automation is expected to grow by 10 percent by 2019, Kion said in a presentation.
Kion’s capital increase is planned before the closing of the deal in the fourth quarter. In addition to proceeds from the share sale, Kion will consider bonds and Schuldscheine, a form of promissory note.
“This depends on the state of capital markets,” said Thomas Toepfer, Kion’s chief financial officer.
Major shareholder Weichai Power (000338.SZ), which owns 38 percent of Kion, fully supports the plan to increase capital by up to 10 percent, Kion said.
Update: AEA Investors, a U.S. private equity firm, and Ontario Teachers’ jointly acquired Dematic from European investor Triton in January 2013. No financial terms were released.
(Reporting by Maria Sheahan; Editing by Georgina Prodhan)
(This story has been edited by Kirk Falconer, editor of PE Hub Canada)
Photo courtesy of Dematic