Private equity firm KKR is preparing for a stock market flotation or sale of German defence supplier Hensoldt in a potential two billion euro ($2.2 billion) deal, people close to the matter said.
The buyout group in recent weeks heard bankers present options for exiting its investment, including a listing of 20-30% on the stock exchange or sale to a defence group or private equity business next year, they said, adding KKR was expected to hire an adviser to help arrange a deal.
KKR declined to comment.
The investor bought Airbus’s defence electronics business for 1.1 billion euros in 2016 and rebranded it Hensoldt, after a 19th century German maker of binoculars and telescopes.
The business comprises military sensors, electronic warfare equipment, avionics and optronics. It employs 4 400 staff and has annual sales of 1,1 billion euros.
Hensoldt intends to double revenues by 2022, benefiting from an expected European military spending spree.
Hensoldt’s high-tech cameras are used in Tornado fighter jets flying surveillance missions over Syria and Iraq, while it also supplies radar for Eurofighter jets and periscopes for submarines and Leopard and Puma tanks.
The company also supplies identification systems for combat jets, night vision devices, radars for civil air traffic control and systems for civil and military efforts to counter drones.
Hensoldt is set to benefit from equipping the new Franco-German fighter jet, currently Europe’s largest defence project, which will replace Eurofighter and Rafale from 2040.
The group is expected to pitch for contracts to supply the German navy’s new multi-purpose combat ship 180 and the German army’s new missile defence system.