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.

• Frerk is a leading German system integrator for diesel-gas gensets, with expertise in turnkey systems and a strong reputation in mission-critical segments.

• The deal aligns with the strategy to build a scalable, global energy platform, leveraging previous acquisitions and expanding reach in Europe and the US.

• Reduces dependence on cyclical internal combustion engine business by focusing on high-growth, resilient sectors.

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.

• Expected to add €100 million in profitable annual revenue.

Synergies and expected cost savings

• Synergies will be realized by combining DEUTZ's scale, industrialization, and global reach with Frerk's technology and market presence, enhancing manufacturing, sourcing, and service capabilities.

• Substantial synergies 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.