DEUTZ (DEZ) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition strengthens position in the fast-growing European backup and emergency power market, especially for data centers and critical infrastructure driven by AI and digitalization.

• Expands presence in Europe and complements recent US market entry, supporting a global energy business strategy and reducing dependence on cyclical internal combustion engine business.

• Frerk is a leading German system integrator for diesel-gas gensets, with a strong reputation and established customer base in data centers and critical infrastructure.

Financial terms and conditions

• Frerk's expected revenue for 2025 is slightly above EUR 80 million, with about 10% from services and the rest from new builds.

• EBITDA margin is in the low double digits.

• Purchase price is in the upper double-digit millions of euros.

• The business unit aims for EUR 500 million revenue by 2030, with the acquisition contributing to reaching EUR 280 million by 2026 and €100 million in additional annual revenue.

Synergies and expected cost savings

• Substantial synergies are anticipated across procurement, production, sales, and service due to complementary capabilities.

• Knowledge and technology transfer between Frerk and Blue Star Power Systems will enable local assembly and efficient logistics.

• DEUTZ's extensive European and U.S. service networks will enhance Frerk's ability to serve customers across regions.