Japanese tech giant NEC acquires Denmark’s largest tech company

Japanese tech giant NEC has announced that it has reached a deal with the largest technology company in Denmark: IT giant KMD Holding. The deal is expected to be completed by the end of February at the latest and is said to be worth $1.22 billion.

Advanced International, an American private equity firm, will sell KMD Holding to NEC. The company would like to take this over in order to be able to generate more turnover from the public sector. There is an increasing demand for digital services and NEC wants to respond to this precisely.

Digital domain

NEC Chairman and CEO Takashi Niino told various media that in this way his company is adopting a business model that sells platforms in the digital government domain. There is also a lot of turnover to be achieved from this: last year, KMD reported that it had achieved a turnover of DKK 4.65 billion.

This means that KMD’s turnover amounts to just 610 million euros. At the same time, there was an operational loss of SEK 54.5 million. This amounts to 7.3 million euros. That loss was the result of internal restructuring, and the company expects to be profitable next year.

Substantial expansion

For NEC, this is the second largest acquisition it has ever made. The company wants to spend 1.81 billion dollars next year on these kinds of acquisitions. Denmark and the UK are seen as European role models for the implementation of unified digital government measures when it comes to improving administrative services and reducing costs, said CEO Takashi Niino.

The intention is to use the services and experiences of KMD Holding to tap into the wider European market. KMD is currently active in Northern Europe, but as far as NEC is concerned, these activities are rapidly being extended to the whole of Europe and then worldwide.