NEC is buying KMD Holding ApS, the holding company of KMD A/S (KMD), the largest Danish IT company. The price is around 8 bn Danish Krone (€1.1bn) and ownership will move from Advent International, a private equity investor. The acquisition is expected to be completed by the end of February 2019.
KMD mainly provides software and IT services in Denmark through business models that generate profit continuously on a recurring basis, such as software as a service (SaaS) offerings. Specifically, KMD has a strong customer base among central and local governments and has a wide variety of software for supporting the digitization of Denmark, which is the top ranking country in the "UN E-Government Survey 2018," announced by the United Nations Department of Economic and Social Affairs. KMD itself has track record of executing strategic M&A which has broadened its service offering in a number of key verticals.
NEC aims to grow its business domain through its biometrics and artificial intelligence (AI) technologies to develop areas that include public safety, digital government and smart transportation. These initiatives are being implemented under the "NEC Safer Cities" program, which supports the realisation of safe, secure, efficient and equal cities.
Takashi Niino, President and CEO, NEC Corporation: “Through this acquisition, NEC will acquire a business model that leverages platforms in the digital government domain as it aims to expand business from northern Europe to the whole of Europe and globally.”
“This is an historic moment for KMD. Becoming a part of NEC will give KMD a new and very robust platform for the strategic development of our business,” said Eva Berneke, CEO, KMD. " NEC focuses on solutions for society and we are proud that NEC acknowledges our competencies in this respect. We look forward to working together on achieving new common goals and making even better products for our customers.”
NEC sees the acquisition as a match with its strategic ambitions within the public sector. KMD has solid experience and a strong portfolio of software in this market segment. NEC will promote the global reach of KMD's software through NEC Group's sales channels, including the mutual sale of software between KMD and UK-based Northgate Public Services Limited, which NEC acquired in January 2018.
