Defense industry - Hensoldt wants to take over defense specialist ESG
The defense electronics group Hensoldt wants to take over the defense specialist ESG from Munich. The deal will be worth up to 730 million euros, as the company announced on Tuesday evening in Taufkirchen. The transaction values ESG at 675 million euros, with a possible additional 55 million euros.
The purchase of the system integrator for defense and security is to be financed with a capital increase of up to ten percent and debt of around 450 million euros. ESG is currently owned by the investment company Armira. The authorities still have to give their approval for the deal.
Hensoldt expects annual cost savings of around 19 million euros, and there should also be potential for more turnover through complementary sales. "The acquisition of ESG fits perfectly into our overall strategy and accelerates the development of Hensoldt," said Group CEO Thomas Müller according to the press release.
For the current year, the managers expect ESG to generate sales of around 330 million euros. In the coming years, revenue is expected to increase annually in the low double-digit percentage range. Earnings before interest, taxes, depreciation and amortization (EBITDA) are expected to account for around 14 percent of the targeted turnover this year.
Hensoldt hopes that the deal will be completed by the end of the first half of 2024 at the latest. The federal government and major shareholder Leonardo are supporting the project, it was reported. Germany holds a good quarter of Hensoldt's shares via Kreditanstalt für Wiederaufbau.
Announcement
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- ESG, a defense and security system integrator based in Munich, Bavaria, is being targeted for acquisition by the defense electronics group Hensoldt.
- The purchase price for ESG, valued at up to 730 million euros, will be partly financed through a capital increase and debt, as announced by Hensoldt in Taufkirchen.
- Hensoldt anticipates annual cost savings of approximately 19 million euros and potential for additional revenue through complementary sales after the acquisition of ESG.
- According to the company's projections, ESG is expected to generate sales of around 330 million euros this year, with an annual increase in revenue in the low double-digit percentage range in the coming years.
Source: www.stern.de
