SWITZERLAND: Knorr-Bremse has agreed to acquire railway safety hardware and software company Duagon Group from private equity investor Deutsche Beteiligungs. Knorr-Bremse said Duagon would complement its existing business, and increase its share of revenue in the rolling stock market which has above-average growth.
Knorr-Bremse said the deal has an ‘attractive’ purchase price of around €500m plus a potential performance bonus based on predefined results. Closing of the transaction announced on September 25 is subject to customary regulatory approvals.
Good fit
Knorr-Bremse said Duagon is a good fit, and would generate significant synergies in electronics for braking and door systems and ‘perfectly complement’ its Selectron and KB Signaling businesses.
Established in 1995, Duagon employs around 750 people across eight countries and has customers including vehicle manufacturers, systems integrators and infrastructure companies in Europe, North America, China, India and Australia. Knorr-Bremse estimates that Duagon will generate revenues of around €175m for 2026 with an operating EBIT margin of around 16%, which Knorr-Bremse plans to increase through revenue growth and synergies of €5-10m by 2028.
Strengthening the rail business
‘Our acquisition of Duagon, a successful electronics supplier, demonstrates once again that we are strengthening our rail business, which will drive up profitable growth’, said Knorr-Bremse CEO Marc Llistosella. ‘We are honing our technological expertise in the key areas railway electronics and rail signalling technology and we are increasing the high-margin share of revenue in rail vehicles.’
Dr Nicolas Lange, Knorr-Bremse executive board member for the Rail Division, said ‘this acquisition will take Knorr-Bremse a big step closer to its goal of becoming a leading Tier 1 partner for the entire rail transport system’.
Duagon CEO Dr Michael Goldbach said ‘with Knorr-Bremse, Duagon gains a partner with whom we will strengthen and rapidly expand our position as a leading embedded electronics supplier in the rail market. We look forward to benefitting from Knorr-Bremse’s strengths and expertise, leveraging them in all business segments, and bringing our complementary expertise to the world of Knorr-Bremse.’
Deutsche Beteiligungs said it has succeeded in generating an above-average return by ‘resolutely implementing its buy-and-build strategy and by systematically positioning Duagon as a leading independent technology partner’. This included the acquisitions of MEN Mikro Elektronik (2018), OEM Technology Solutions (2019) and TechOnRails (2020).
