Jungheinrich expands business by acquiring warehouse machinery company

Jungheinrich expands business by acquiring warehouse machinery company


Forklift maker Jungheinrich announced Wednesday its intention to capitalize on the growth of e-commerce by acquiring a US company. Jungheinrich announced in Hamburg on Wednesday the acquisition of Storage Solutions Group, a supplier of rack systems and warehouse equipment, for approximately $375 million. To this is added a bonus linked to management results. The acquisition will be financed with cash and existing foreign capital and will be completed in the second quarter of 2023. From the beginning, a positive contribution to earnings per share and free cash flow can be expected. The stock market welcomed the news.

Entering the US inventory management systems market will allow the company to serve European customers in the US as well, wrote analyst Stefan Augustin of Warburg Research. The acquisition of Storage Solutions Group also completes the technological offering and is therefore positive.

Storage Solutions, headquartered in Westfield, Indiana, is a warehousing, automation and integration company that employs 170 people. Its customers include leading brands, including logistics, e-commerce, retail, food and beverage, and manufacturing . In 2022, Storage Solutions is expected to post revenue of about $290 million and adjusted earnings before interest and taxes (Ebit) of about $34 million, Jungheinrich said.

Jungheinrich hopes that this acquisition will give it access to key logistics nodes in the United States. In addition, the company may in the medium term be active in the neighboring countries of Canada and Mexico. The acquisition also complements the existing partnership with Mitsubishi Logisnext Americas (MLA), which remains Jungheinrich’s sole business in the North American industrial truck market and will not be affected by the transaction.

“The acquisition of Storage Solutions is an important step in implementing our 2025+ strategy,” company president Lars Brzoska said in the statement. According to him, that goal is supported by the additional sales generated by Storage Solutions. For 2025, Jungheinrich predicts sales of 5.5 billion euros, of which a fifth should be made outside Europe.

Shares of the forklift maker rose 4.6% on the MDax. The price increase since the beginning of the year is therefore equal to almost a third. However, the name had lost a lot of value last year./mne/ngu/mis