Kaba Merger With Dorma Holding to Create $2.1B Access Titan

The combined entity is expected to benefit from distribution and cost-saving synergies which would allow it grow faster than standalones.

RÃœMLANG, Switzerland – Kaba, based here, agreed to merge with Germany’s Dorma Holding to create a top-three player in the door hardware and access control equipment market with revenue topping $2.1 billion.

While Kaba will become the bigger partner in the deal, a capital increase will make the family which owns Dorma the majority shareholder of the new entity, Kaba said in a statement. The combined companies will have 16,000 staff and operations in more than 50 countries.

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According to the most recent IHS report on electronic access control, the merger of Kaba and Dorma would make the combined company the second-largest player in EMEA’s access-control industry, second only to Assa Abloy.

The merger will combine complementary product offerings, as well as fill gaps in each company’s current portfolio of physical security and entrance-control equipment, says Blake Kozak, a principal analyst, security and building technologies, for IHS.

“Dorma will bring to the deal door automation-control expertise including revolving doors, swing doors, slide doors and industrial doors; while Kaba offers a larger portfolio of pedestrian-control equipment such as turnstiles, gates and security doors, as well as hospitality and commercial electronic-locking devices,” Kozak says.

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Kaba will become a holding company that owns a 52.5% stake in the new operating business called Dorma+Kaba. The Mankel and Brecht-Bergen family, which owns Dorma, will acquire a 9.1% stake in Kaba. That pushes the family’s overall interest in the merged business to 52.3%, while ensuring it doesn’t have absolute control since their direct stake is just 47.5%.

“By merging our two globally established companies, we will significantly strengthen our market position,” Dorma Chairman Hans Gummert said in the statement. “Our strategies also largely correspond with one another.”

The deal represents the biggest Swiss-German transaction so far this year, according to data compiled by Bloomberg. The merger will generate cost savings of between 60 million francs and 70 million francs by the fourth year after the merger, the company said.

The merger is subject to approval from a meeting of Kaba shareholders on May 22. The two companies expect to complete the combination in the third quarter. Current Kaba CEO Riet Cadonau has been nominated to head the merged company while Kaba Chairman Ulrich Graf will chair the new firm’s board of directors.

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