Kion completes Dematic acquisition

Kion Group AG has completed its acquisition of U.S.-based systems integrator Dematic Corp., positioning the firms to combine their strengths in warehouse hardware, software, and material handling automation, the companies said Wednesday.

The German industrial truck manufacturer made waves in the industry when it announced in June that it would spend $2.1 billion to take over the Atlanta-based automation and supply chain optimization specialist Dematic.

Now that the deal is now complete, the Kion Group can leverage a broad portfolio of products ranging from forklift trucks to fully automated material handling solutions, allowing it to tap into high-growth trends, Kion said.

"Things are changing, not just e-commerce but technology, globalization, industrialization, and the ability to use IT, digitalization, the internet of things, all converging," Kion CEO Gordon Riske said in an interview with DC Velocity. "So our customers are looking not only for forklifts but for entire solutions, automated vehicles, all those types of things."

The company also announced a new leadership team, including former Dematic North America CEO John Baysore as president and CEO of the new Dematic operating unit. He replaces departing Dematic CEO Ulf Henriksson. Reporting to Baysore will be Jeff Moss, executive vice president international; Frank Herzog, executive vice president finance and CFO; and Scott Watts, executive vice president North America.

One of the priorities of the merger will be an effort to create new products and technologies that meet the supply chain requirements of the future, specifically in automated guided vehicles (AGVs), Baysore said. The companies will pursue that goal by combining Kion's $125 million research and development budget with Dematic's $70 million R&D budget under a new division lead by the Kion CTO.

"We've been working with autonomous navigation, and where Kion is is ahead of where Dematic is," Baysore said in the interview. "So I think we'll be able to bring products to market faster to Dematic's customer base in autonomous navigation. And if you look at where Dematic's robotic picking and mobile robotic picking are, then that autonomous navigation and what we're doing with AGVs will just catapult us to another level."

Following the acquisition, the Kion Group will start managing its business in three segments: Industrial Trucks and Services (including Linde Material Handling EMEA, STILL EMEA, Kion APAC, and Kion Americas), Supply Chain Solutions (including Dematic, Egemin Automation, and Retrotech), and Corporate Services (including headquarter functions and group-wide services such as internal logistics and IT).

The two divisions will complement each another with cross-selling opportunities, as Dematic makes use of the reputation and leading market positions of Kion's forklift brands in Europe, China, and Brazil, while the Kion Group benefits from Dematic's strong position in the U.S. and European automation markets, Kion said.

"We are really in a high growth, high tech industry," Riske said. "I know many people thought of logistics 10 years ago as 'Oh, you've got to drive a fork truck, it's kind of dirty and greasy and that's it.' But the whole thing about industrialization, supply chains, e-commerce, people having to be more productive, is driving this business globally. I see very positive market development in the next years to come. We are just at the beginning of digitalization, that will give it another bump up in productivity, and thereby increase the business again."