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NEC Places $1.2B Bet On Public Safety In Acquiring Danish Firm

The deal is expected to close at the end of February for about $1.21 billion with NEC buying KMD Holding ApS from Advent International, private equity investors, NEC said in a statement.

NEC Corp. plans to grow its technology services business – and expand its public safety operations -- with the recent purchase of Denmark’s largest IT company, KMD Holding ApS, according to a statement from NEC.

The deal is expected to close at the end of February for about $1.21 billion with NEC buying KMD from private equity firm Advent International, NEC said in a statement. Last year, NEC bought Northgate Public Services, a U.K.-based company which, like KMD provided IT services to local governments.

"Denmark and the United Kingdom are considered European role models for the implementation of unified digital government measures in order to improve administrative services and reduce costs," said NEC Corp. President and CEO Takashi Niino in a statement. "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."

KMD has annual sales of about $849.8 million with a workforce of 3,200 employees and is headquartered in Ballerup, Denmark, NEC said.

The company does about 72 percent of its sales with local and central governments in Denmark, with 58 percent of that business drawn from its SaaS offerings, and 17 percent from consultation.

NEC was not available for comment since those involved in the deal work in the company’s Tokyo offices, which are closed until Jan. 8, according to a spokesperson in its U.S. office.

According to NEC, the goal of the acquisition is to expand its safety business, and its business domains to make NEC Safer Cities a reality. NEC describes Safer Cities as an all in one solution for governments, that covers public safety, administration, and transportation.

KMD said it plans to leverage the complementary platforms of both KMD and Northgate and then deploy them globally through NEC’s worldwide reach and resources.

"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. NEC develops cutting-edge technologies and has a global organization with strong capabilities," Eva Berneke, CEO, of KMD said in a statement.

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