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Case Studies

Peter A. Sokoloff & Co. regularly analyzes transactions which occur within the industries covered. An archive of these case studies is kept online as a courtesy to our colleagues. To receive by e-mail new case studies as they are prepared, please e-mail [email protected] with your contact information.

Archives > Transaction Case Study 80

SOKOLOFF & COMPANY CASE STUDY:
Kaba Merges with Dorma

DATE ANNOUNCED: April 30, 2015

MERGER: Kaba Holding AG (Swiss Exchange: KABN) to merge operations with privately owned Dorma Holding.  The new entity is called dorma+kaba Holding GmbH + Co. KGaA (KGaA is the acronym for a German Limited Partnership). 

FORM OF PURCHASE PRICE: Merger – Business Operations to be contributed by each company to a newly formed German company owned jointly by Kaba and Dorma.

SELLER’S FINANCIAL INFORMATION AND M&A MULTIPLES – in CHF Million

Year

Dorma
FY 2014

Kaba
FY 2014

Combined
Trailing Twelve Months
June, 30, 2014

Enterprise Value*

1,631.8

1,930.6

3,561.9

Percentages

44.1%

55.9%

100%

Revenue

1,238.2

1,003.5

2,241.7

EBITDA

147.3

155.3

302.6

Net Cash (Cash less Debt)

143.9

35.4

179.3

Ending Percentage adjusted for cash remaining with Kaba

47.5%

52.5%

100%

Revenue Multiple

1.32

1.92

1.59

EBITDA Multiple

10.1

12.2

11.8

*Enterprise Values are extrapolated from available information.  Based on actual percentages and multiples reported, true Enterprise Value will vary slightly from what is shown.

*All conversions to CHF from Euros were as of 6/30/14 – 1.225608

TRANSACTION DRIVERS
Dorma and Kaba’s technological expertise, products as well as distribution channels complement each other.  The shared distribution and service networks, cross selling, and the positioning as a one-stop-shop for security and building access solutions open up significant added growth potential for the merged company.  Thomas P. Wagner, CEO of Dorma: “Together with Kaba, we are taking a big step forward. We will broaden our offering, strengthen our global presence and increase our innovation power. This will allow us to better and more quickly take advantage of opportunities that arise through megatrends such as urbanization and digitalization.”

SOKOLOFF COMMENTARY:
It is very rare to see a deal that accomplishes the concept of a “merger of equals.”  This well-crafted merger plan is about as close as you can get.  With 52.5%, Kaba is the controlling entity in newly formed dorma+kaba.  On the other hand, the Mankel and Brecht-Bergen family, owners of Dorma, will acquire a 9.1 percent stake in Kaba, adding up to 52.3 percent ownership of the whole.  That should set the scene for mutual respect and harmony down the line.

Our firm has been privileged to enjoy relationships with both companies and we wish them well as they continue to build a world class business.

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