DEUTZ (DEZ) investor relations material

Deal rationale and strategic fit

• Acquisition targets rapid entry and expansion in the growing European defense sector, especially UAVs, aligning with a dual-use strategy to diversify beyond combustion engines and strengthen presence in high-margin markets.

• SOBEK is a profitable, established leader in electric drive systems for drones, motorsport, and aerospace, supporting the acquirer's transformation into a multi-business system integrator.

• The deal provides strategic access to the European defense tech ecosystem, leveraging local supply chains and ITAR-free sourcing.

• Expands presence in a fragmented, high-growth defense tech supplier landscape, reducing dependency on traditional business lines.

• Enhances the acquirer's role as a systems provider in critical European defense and adjacent tech ecosystems.

Financial terms and conditions

• All shares of SOBEK acquired at an EBITDA multiple of 11x, considered favorable for the sector.

• SOBEK expected to deliver €10–12 million EBITDA in 2025, with revenue in the low to mid double-digit million euro range and significant double-digit margins.

• Transaction financing secured through existing credit lines, with an option for a capital increase of up to 10% of current share capital depending on market conditions.

Synergies and expected cost savings

• Industrialization scale, manufacturing, sourcing, and service infrastructure from the acquirer will enhance SOBEK's operations and accelerate scaling in the drone market.

• Joint development of modular system platforms and powertrain kits for defense and adjacent markets is expected.

• Cross-selling opportunities and lifecycle revenues anticipated through bundling with the existing customer base.

• SOBEK's integrated electric drives offer synergies for alternative drive systems, especially in control technology and off-highway sectors.