Dematic, a Luxembourg-based global supplier of integrated material handling services, said on Wednesday that it has agreed in principle to buy HK Systems, a New Berlin, Wis.-based automated material handling and software provider with a strong presence in North America.

The transaction, terms of which were not disclosed, is expected to close sometime in the third quarter, the companies said.

In a statement announcing the deal, the two companies said the combination will offer businesses greater product and geographic coverage from a single-source provider.

By adding HK's capabilities, Dematic can provide "customers throughout the world [with] an enhanced solutions offering. We can now leverage our respective expertise and experience in serving the supply chain logistics market not only in North America but globally, to deliver added value to both existing and potential customers," said Roar Isaksen, Dematic's president and CEO, in a prepared statement.

John Baysore, president and CEO of Dematic North America, said the combined companies offered synergies that will allow them to meet customers' demands for "integrated solutions that enable them to move products and information fast, reliably, and efficiently through the supply chain." Dematic's North American operations are based in Grand Rapids, Mich.

John Splude, HK's executive chairman, told DC VELOCITY that HK had received a number of inquiries from potential buyers and that the owners decided to pursue them as the economy and financial markets recovered. "Clearly, the Dematic folks and their owners [Germany-based Triton Beteiligungsberatung GmbH] were an important party to talk to about the advantages of putting the two companies together," he said.

From HK's perspective, he added, the advantages to the acquisition are Dematic's international capabilities and financial strength. "We've been trying to build an international presence, but that is difficult and expensive to do," he said.

Splude said the companies have little overlap in products and services. Dematic was particularly attracted to HK's AGV line and its manufacturing plant in Salt Lake City, which Splude said is the only one in the world specifically designed to build AGVs and AS/RS machines, and in its HK Logistics operations.