Demant (DEMANT) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition expands global hearing care footprint, especially in Germany, a key market, and aligns with ambitions to improve lives through hearing health.

• KIND brings a strong brand, around 650 clinics, and a skilled workforce of about 3,000 employees, supporting a strong cultural and operational fit.

• The deal leverages Demant's technology and global scale with KIND's established market position and long-standing partnership.

• Combined entity will operate over 900 clinics in Germany, solidifying a leading position in a highly fragmented and competitive market.

• Acquisition supports ambitions in product innovation, technology, and service excellence.

Financial terms and conditions

• Total acquisition price is EUR 700 million (DKK 5.2 billion), paid in cash at closing, on a cash and debt-free basis, fully financed through debt facilities.

• KIND is expected to contribute around EUR 300 million in revenue from 2026 onwards, with an EBIT margin in the mid-teens before special items.

• Revenue is projected to grow organically at 4%-6%, in line with global market growth.

• Group gearing multiple will temporarily rise to 3.5 at closing, with a target to return to 2.0-2.5 within 18-24 months; share buy-back program suspended.

• The acquisition is expected to be accretive to EPS and free cash flow from year one.

Synergies and expected cost savings

• Important synergies include increased share of wallet, conversion to premium technology, and scale benefits, driving higher profitability.

• Synergies are expected to be fully realized by the end of 2027, with full-year effect from 2028; EBIT margin contribution will align with group levels.

• Cost synergies may include lower software licensing and operational efficiencies, though focus remains on sales-side synergies.

• Special items related to transaction and integration costs will be recognized in the first two years post-closing.