DEUTZ (DEZ) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition targets a leading North American genset manufacturer, expanding into the decentralized energy supply market and aligning with the DualPlus strategy for energy diversification.

• Strengthens presence in the US and North America, leveraging technology, service know-how, and supporting global expansion in green and hybrid genset technologies.

• Marks a shift from component manufacturing to providing complete solutions for decentralized energy supply, including microgrids and backup power.

• Focuses on less cyclical, high-growth markets driven by demand for decentralized power and renewable energy integration.

• Provides access to new technologies and service capabilities, including hydrogen, hybrid, diesel, eFuels, and HVO-powered engines.

Financial terms and conditions

• 100% of Blue Star shares acquired; signing completed, closing expected in H2 2024 pending regulatory and merger clearance.

• Valuation is within standard market parameters for the PowerGen sector, at the lower end of 6–15x EBITDA multiples, not in double digits.

• Blue Star expected to generate over $100 million in revenue in 2024, with potential to reach $150 million in the medium term and EBITDA margin in the low double-digit range.

• Financing will not significantly impact equity ratio, which will remain well above 40%.

Synergies and expected cost savings

• Anticipated synergies in sales, distribution, and customer access, with opportunities for economies of scale and increased vertical integration.

• Opportunity to leverage DEUTZ’s service network and introduce DEUTZ engines into Blue Star’s product lines.

• Potential to expand service and aftermarket business, especially in regions where distribution networks have gaps.

• Integration of Blue Star’s product offerings and industry relationships to drive global expansion.

• Global revenue in the energy segment targeted to reach €500 million by 2030 through organic and inorganic growth.