Demant (DEMANT) M&A Announcement (Media) summary

Deal rationale and strategic fit

• Acquisition of KIND, a major German hearing care retailer, expands the buyer's global footprint to over 4,500 clinics and strengthens its position in Germany and Central Europe.

• The deal aligns with the buyer's long-term strategy to expand globally and improve lives through hearing health, leveraging KIND's strong brand and market presence in Germany, Luxembourg, Switzerland, Austria, and Singapore.

• Both companies share similar values and a long-standing partnership, supporting a seamless cultural and operational integration.

• The acquisition leverages KIND's skilled workforce, proven track record, and strong financial fundamentals.

• The buyer aims to combine its technology and global scale with KIND's market reach.

Financial terms and conditions

• The acquisition price is €700 million (DKK 5.2 billion), paid in cash at closing and fully financed through debt facilities.

• The Group's gearing multiple will temporarily rise to 3.5 at closing, with a target to return to 2.0–2.5 within 18–24 months post-closing.

• The share buyback program is suspended immediately to prioritize financial stability.

• KIND is expected to contribute around €300 million in revenue in 2026, with organic growth in line with the global market rate of 4–6% p.a.

• The acquisition is expected to be EPS accretive in the first year after closing.

Synergies and expected cost savings

• Synergies are expected from share-of-wallet conversion to premium technology, scale benefits, and expanded product offerings, with full realization by end of 2027 and full-year effect from 2028.

• Once synergies are realized, KIND's EBIT margin contribution is expected to align with the buyer's current group level.

• Synergies are primarily from being part of a larger group with manufacturing capabilities, not from store closures or workforce reductions.