Demant (DEMANT) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition expands global hearing care footprint, especially in Germany, making the company one of the largest players in that market with over 900 clinics and a network of 4,500+ clinics worldwide.

• The two companies share complementary values, business focus, and a long-standing partnership, ensuring a strong cultural and operational fit.

• The deal leverages Demant's technology and global scale with KIND's established market position and strong brand.

• KIND brings a network of around 650 clinics, mainly in Germany, and a proven track record since 1952.

• The acquisition supports ambitions in product innovation and technology, combining global scale with local expertise.

Financial terms and conditions

• Total acquisition price is EUR 700 million (DKK 5.2 billion), paid in cash at closing and 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 and organic growth of 4%-6% p.a.

• The transaction is expected to increase the leverage ratio to 3.5 at closing, above the normal target range, with a plan to deleverage back to 2.0-2.5 within 18-24 months; share buyback program suspended.

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

• Group financial outlook for organic growth and EBIT remains unchanged pending closing.

Synergies and expected cost savings

• Important synergies include growing share of wallet, conversion to premium technology, and scale benefits, with full realization targeted by end of 2027 and full-year effect from 2028, bringing EBIT margin contribution to group level.

• Cost synergies may arise from group scale, such as software licenses, but focus remains on sales-side synergies.

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