Körber sees no cash limit for technology acquisitions
13 February 2020
Körber AG, a German industrial technology group, is ready to make acquisitions to expand its hardware platforms with software, robotics, and digital capabilities, Chief Executive Officer Stephan Seifert said.
The company has EUR 1bn in cash for all investment activities, a high equity ratio, and “no limit” for big deals, having put nearly EUR 1bn towards software and technology acquisitions over the past six to seven years, Seifert said.
Körber generates EUR 2.5bn in annual sales and is backed by the Körber Foundation, which receives a portion of the company’s profits in the form of a dividend and invests in the company’s expansion plans.
The company may target several acquisitions a year with its in-house M&A team and preferred external advisors, who work off a long list of potential targets, he said. Körber executed its 2017 acquisition of Minneapolis, Minnesota, cloud-based software provider HighJump in eight weeks, he added. William Blair advised the Hamburg-based company on the HighJump deal.
Following its most recent acquisition of Brazil’s Otimis, a supply chain management software company, and Australia’s Cehesio Group, a voice-directed and autonomous mobile robotics specialist, Körber will look for similar software technology buys to bolster its capabilities and expand its global footprint, he said.
The CEO pointed to its pharma division, with manufacturing processes, packaging, and other automation tools, as a focus for a buy and build strategy. Körber will also look for buys to strengthen its logistics division, which helps customers set up complex logistics systems.
“We only go for first-class assets, unique technology that we don’t have, or access to a region,” Seifert said.
Technology companies are more likely to be in Europe or in the US, where it will look to establish a market-leading position, he said. Still, Körber may use acquisitions to strengthen its foothold in Asia in the medium-term, Seifert added.
Körber was touted as a buyer for Bosch Packaging Technology, with food and pharmaceutical packaging line specialties, which was sold to private equity firm CVC last year, Mergermarket reported. Renamed Syntegon, the packaging technology company cost CVC at least EUR 600m, as reported.
Seifert declined to comment specifically on Syntegon but said Körber does not shy away from auctions, though it prefers deals with private, small- to medium-sized companies. Typically, targets have around EUR 200m in sales, but it has no financial limitations on larger transactions. “On our long list, there is not a single target with financing limitation.”
Körber will also make buys for its tissue and tobacco divisions where appropriate, but the CEO placed a stronger emphasis on its pharma and logistics divisions, adding that it has no plans to make divestments.
Its tissue division makes processing and packaging machines for toilet paper, folded tissues, and paper towels. Körber’s tobacco division has tobacco processing, filter, and cigarette manufacturing equipment lines. Körber digital helps the company develop new business models and advance the digitalisation of the company and is the company’s fifth business unit.
Körber will also co-invest into start-ups directly where it sees a potential future technology, as it did with Magazino, an automation specialist in the logistics space, Seifert added. The company also put some cash towards government-backed investment vehicles such as Germany’s High-Tech Gründerfonds and other selected accelerators.
Körber, with over 10,000 employees today, was founded in 1946 by inventor Kurt A. Körber as a cigarette machine repair shop that then went on to develop a cigarette filter attachment machine, a novelty at the time.
