M&A - Kontron acquires Hartmann and W-IE-NE-R

Kontron has announced the acquisition of Hartmann and W-IE-NE-R, a group of rugged computing systems manufacturers based in Germany and the United States, from Phoenix Mecano AG. The companies generated revenues of around EUR 18 million and an EBITDA of approximately EUR 3 million in 2022. The purchase price is EUR 22.1 million subject to adjustment depending on the balance sheet upon closing. The closing of the transaction is expected by Q4. This acquisition drives our strategy to strengthen our fast-growing high-margin segment “Software + Solutions” enabling solutions in the areas of avionics and security.

Hartmann designs and manufactures integrated modular VPX computing systems for ultra-high speed and harsh environments resilient to radiation and external influences. W-IE-NE-R complements the portfolio with redundant VPX power supplies. The biggest markets are United States, Germany, and Switzerland. This impressive portfolio is based on 50 years of experience and driven by a total of 77 employees located in Germany and the United States. In 2022, total revenues were about EUR 18 million at an attractive gross margin of over 50% and an EBITDA of approximately EUR 3 million.

This acquisition generates high synergies and supports our strategic program “Shape” to enlarge the product portfolio with vertical market solutions offering higher margins. Together with our VPX blade systems and our US avionics systems, Kontron will become a leading global player in the areas of avionics and security. Including this acquisition, we plan to achieve more than EUR 100 million revenues in these markets in 2024. Margins in these areas are strong. We expect a gross margin of over 50% and an EBITDA above 15%.

For Kontron, this acquisition is the next step up the value chain of its fast-growing high-margin business segment “Software + Solutions”. The Avionics and defense business will together with Kontron's transportation business and susietec® turn “Software + Solutions” into the biggest segment by 2025 and will achieve an expected revenue share of more than 50% by 2027.