Behind the Korber AG and DMLogic Acquisition

It’s easy to write off the North American materials handling industry as staid and predictable. And yet, there is a remarkable dynamism in the industry right now. While industry leaders already doing business in the U.S. continue to consolidate and grow their business, we continue to see new entrants to the market, looking for their share of the North American pie.

The most recent case in point: On July 10, Korber AG, a German-based automation company with a large presence in the European auto industry, acquired a majority stake in DMLogic, a specialized supplier of logistics software headquartered in Pittsburgh. With 11,000 employees and $2.5 billion Euros in sales, Korber AG could be one of the largest players many of us in the industry have ever heard of. You can read the full press release here.

While it’s the latest such acquisition, the DMLogic acquisition is by no means unique. Last year, German provider Erhardt & Partner Solutions, another German technology supplier, brought onboard Scott Deutsch, a former Vocollect executive, as its new president of North America to take on the U.S. market for WMS and voice technology. And this past January, Korber acquired Fargo Automation, a provider of automated packaging equipment for the pharmaceutical and medical device industries.

What then drove this acquisition? According to Bob Kennedy, an industry veteran and DMLogic’s vice president of business development, it’s the lure of a new, and growing market. “Korber has about 130 different company locations, and most of their work is in Europe and the majority of that is in Germany,” Kennedy said. In those markets, he said, they are competitive with the other large European systems integrators, with deep experience in the automotive, pharmaceutical and tobacco industries. “They have customers, including the German auto makers, manufacturing in North America and Mexico and they want local support,” Kennedy said.

With acquisition of DMLogic, Kennedy believes they gain a team with experience doing support work – especially software support work - for large customers. That includes a new serialization tool for the pharmaceutical industry. As for DMLogic, Kennedy said that it builds a new practice for the software provider. “When we were brought on by customers doing automation, we stood to the side and concentrated on software,” he said. “That wasn’t something we could offer in the past. Now, we have the opportunity to develop a new practice.”