DEUTZ (DEZ) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition targets rapid entry and expansion in the growing European defense sector, especially UAVs, aligning with a dual strategy to diversify beyond combustion engines and reduce dependency on cyclical markets.

• SOBEK is a profitable, established specialist in high-performance electric drive systems for drones, aerospace, and adjacent sectors, supporting the acquirer's move from component supplier to system integrator.

• The deal enables fast access to new defense ecosystems, leveraging local, ITAR-free supply chains and enhancing technological edge.

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

• SOBEK's expertise supports modular system platform development and expansion into civil aviation, robotics, and medical technology.

Financial terms and conditions

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

• SOBEK generates or is projected to generate annual EBITDA of €10–12 million, with significant double-digit margins and low to mid double-digit million euro revenue in 2025.

• Financing secured through existing credit lines, with potential for a capital increase up to 10% of share capital depending on market conditions.

Synergies and expected cost savings

• Anticipated benefits from leveraging manufacturing, sourcing, service infrastructure, and homologation capabilities to enhance SOBEK's operations.

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

• Cross-selling opportunities and lifecycle revenues expected through bundling with the traditional customer base.

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