Moody’s reviews KION

Moody's Investors Service said it placed the Ba1 corporate family rating and Ba1-PD probability of default rating of KION Group AG on review for downgrade.

The action was triggered by KION's announcement to acquire Dematic (DH Services Luxembourg Sarl, B2 positive), which will increase KION's leverage significantly above the agency’s downgrade trigger of 3 times debt/EBITDA for its Ba1 rating.

On June 21, KION announced the acquisition of Dematic at an enterprise value of $3.25 billion. The transaction will be initially financed with a €3 billion committed bridge loan facility, which will be refinanced through equity, long-term bond and bank debt. Supported by its main shareholder, Weichai Power, KION said it planned to use its authorized capital to issue up to 10% new shares and was also considering additional spectrum of equity generating instruments in line with its conservative financial policy.

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