Renk GmbH is advancing plans to raise capital — possibly through an initial public offering or private share sale — as the military gearbox maker looks to expand amid Germany’s pledge to increase defense spending in the coming years.
(Bloomberg) — Renk GmbH is advancing plans to raise capital — possibly through an initial public offering or private share sale — as the military gearbox maker looks to expand amid Germany’s pledge to increase defense spending in the coming years.
Chief Executive Officer Susanne Wiegand, speaking Tuesday at an event in Munich, said the board is currently weighing a range of options to finance growth and does not want to do it with debt. Wiegand indicated that she would prefer an IPO, but said more analysis is still needed.
“We are now developing concrete options for capital markets,” Wiegand said.
Renk owner Triton Investment Advisers LLP has been exploring such a move for months and has spoken with potential advisers. Triton could seek to value the business at as much as €3 billion ($3.3 billion), Bloomberg reported in February. Renk had a market value of about €750 million when the private equity firm bought it from Volkswagen AG in 2020.
Renk, which manufactures components for the German Leopard 2 and French Leclerc tanks, recorded €849 million in sales last year and currently has a fixed order backlog of €1.7 billion. German military purchases typically account for around 10% of Renk’s defense sales.
Read more: Renk Gears Up for Germany’s Promised Military Spending Spree
Renk expanded its workforce last year in anticipation of the German government’s €100 billion special fund to modernize the armed forces. Yet, Wiegand said she expected about half of the funds to go to US defense firms, as the German armed forces replace existing products.
“In the end, there won’t be a lot of money left for technically advanced new equipment or a true strengthening of the nation’s armed forces,” she said. “Germany lacks a compass for industrial policy in its defense industry.”
(Updates with contact with potential advisers in fourth paragraph.)
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