Customer Communication
Customer Communication - KSB and proposed merger transaction.
The market and our clients would be aware that Davron had entered into discussions with KSB regarding a proposed merger transaction between the acquiring firm KSB SE & Co. KGAA (KSB Germany) and target Firm Davron Equipment CC. These discussions and negotiations progressed well and through various stages, having successfully completed the due diligence requirements of KSB and receiving approval by the competitions commission to proceed with the transaction.
It is unfortunate that despite the successful conclusion of the due diligence process and receiving the competitions commission approval, that the final approval by the KSB board was not received, and the proposed transaction would not go ahead.
In final discussions between KSB and Davron, the reasons given by KSB for not proceeding with the transaction were:
- The KSB Group of companies have recently adopted profitability targets for all KSB group companies, which was to be enforced worldwide. Unfortunately, due to the extremely competitive nature of the fixed fire protection market, the Davron business would not be able to meet these higher profit requirements, which presented a challenge for KSB within the KSB group structure.
- KSB felt that the economic outlook for South Africa was unpredictable and possibly presented many risks.
The KSB board therefore chose not to proceed with the transaction based on already being invested in South Africa through their South African Company, and didn’t want to further extend their risk in the South African market.
Although the acquisition would have presented opportunities for Davron Equipment, Davron do believe that our strengths, focus and service that made us a success over the last 34 years, would continue to contribute to our future success. Davron further believe that there have been some lessons learnt in the due diligence process, and these lessons along with a renewed focus on the challenges ahead, will ensure that Davron are extremely well positioned to remain a leading supplier in the fixed fire protection market.
We thank all our customers for their support in the past, and hope that we can count on their continued support as proceed with business as usual.








