in the future init will also achieve growth through video security solutions
Karlsruhe-based systems provider for intelligent mobility solutions expands product range to include video recording and transmission in vehicles
Additional revenue potential of more than EUR 10m in 2020
Acquisition with double-digit EBIT margin
Karlsruhe, 28 April 2020.
As planned, init innovation in traffic systems SE (ISIN DE 0005759807) is tapping a new area of growth: as set out in an ad hoc announcement in November 2019, the Karlsruhe-based systems provider for intelligent mobility solutions has now completed the first stage of the acquisition of the DResearch Fahrzeugelektronik Group. init subsidiary iris-GmbH has retroactively – as of 1 January 2020 – taken a 51 per cent stake in the leading specialist supplier in the field of audiovisual and digital systems technology for buses and trains. The init Group has thereby added revenue potential of more than EUR 10m for 2020 alone (full consolidation from April 2020). According to the init Managing Board the acquisition already comes with a double-digit EBIT margin, and that could be further increased in the next few years.
The DResearch Fahrzeugelektronik Group, consisting of DResearch Fahrzeugelektronik (DFE), which is the development and production entity, and Derovis GmbH (DVS), the marketing and sales entity for electronic on-board vehicle systems, is active in the growth market of video recording and transmission systems for public transport. In this field, DFE and DVS – both of which, like iris-GmbH, are based in Berlin – already occupy a leading position. In the case of video security systems for buses, they are estimated to have a market share of around 50 per cent in German-speaking countries.
Technological boom market
By extending their systems to include automatic passenger counting, a core competence of iris and init, considerable additional revenue has been generated in recent years. “Here we see great growth potential for the future through a number of other positive effects. In addition to the cross-selling of init products and services in the DFE/DVS customer segments, these effects consist primarily of the expansion of our product range to include multifunctional solutions, the extension of our development capabilities to cover image and video processing, and synergies in product, project and solution development,” according to the init Managing Board.
DFE/DVS already supply more than 800 customers in German-speaking countries and the EU with video recorders, cameras, monitors (analogue, DV and IP), switches, smart terminals for rail vehicles and other modules for communication (mobile and stationary). Through “networking” with iris and init, markets outside Germany, Austria, Switzerland and the EU can also be opened up for DFE and DVS products.
“We know each other very well from many years of working together and we see joining forces under the init umbrella as a great opportunity for further development in a booming technological and broader market. This is especially true for bus and rail transport at the moment, in the age of digitalisation,” said DFE/DVS Managing Director Dr Michael Weber when the contract was signed.
init subsidiary iris has been a supplier and technology partner to DFE/DVS for more than ten years. Given the companies’ technological proximity as well as their location in Berlin, it makes sense initially to bring DVS/DFE together with iris-GmbH. The second part of the share deal to acquire the remaining 49 per cent of the shares is to be completed with effect from 1 January 2022.
init Managing Board: “If things go as planned, the purchase price will quickly be refinanced from cash flow. For DFE/DVS alone, we expect average growth in revenue of more than 10 per cent a year over the next five years.”
