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Reuters
18-05-2025
- Automotive
- Reuters
Breakingviews - Franco-German defence IPO hits private equity snag
BERLIN, May 16 (Reuters Breakingviews) - KNDS was about to bag a great deal. The Franco-German tank maker had a call option to up its stake in Renk ( opens new tab, a $6 billion German-based maker of gearboxes for armoured vehicles, from 7% to 25%. With the call price at 20 euros a share and Renk currently trading at nearly 60 euros, KNDS faced a nice-to-have paper profit of more than 730 million euros. Yet Triton Partners, the buyout firm owning the shares, is having second thoughts about handing them over. The dispute is now for a German court to decide, but it could alter plans by KNDS's shareholders for an initial public offering this year. The options deal dates back to Renk's February 2024 listing, four years after Triton bought the unit from Volkswagen. The shares soared 20% on their first trading day, have risen threefold since then, and outperformed all other European defence companies this year. Triton says KNDS failed to get Italian regulatory approval, which KNDS alleges it didn't need. The lawsuit at least gives time for the two parties to seek a compromise, via a higher price for the Renk shares – although maybe not the current market price. The gearbox maker said on Wednesday its revenue had jumped 14.7% year-on-year in the last quarter with order intake up 163.5%, but the share price only rose 0.5% on the news. The wild ride of defence stocks could be subsiding, as markets have digested and anticipated higher defence spending in Europe. Triton may find this is a good moment to sell, while it's not in KNDS's interest for a prolonged dispute. The group is the key architect of the 'tank of the future' being developed by France and Germany after years of haggling. Its governance is already odd, forcing a German family group and the former division of France's defence ministry to work together. KNDS is yet to confirm its listing plans. Yet based on the 3.8 billion euros of sales it booked in 2024, the company could fetch an enterprise value of up to 19 billion euros if based on the same revenue multiple as Renk – or 14 billion euros on the same metric as Hensoldt ( opens new tab, the German defence electronics firm. As such, 730 million euros of option winnings constitute a material swing factor. The tank maker could instead sell a stake to another industry player, as European authorities want more consolidation in the defence sector. Raising its holding in Renk to 25% would also offer the group another possibility: a reverse merger with its listed supplier that would remove the need for an IPO. Its current smallish Renk stake would however make that option less attractive for its owners. Another reason to cut a deal with Triton. Follow @pierrebri, opens new tab on X CONTEXT NEWS Germany's Renk, the maker of gearboxes for the Leopard 2 tanks sent to Ukraine, reported first-quarter revenue slightly below market expectations on May 14, but a growing pipeline of orders supported its growth. The company posted 273 million euros in sales in the first quarter, up 14.7% over the same quarter last year, a slight miss compared with the 279 million euros seen in a Vara consensus. Order intake increased by 163.5% to 549 million euros in the quarter, the group said.
Reuters
13-05-2025
- Business
- Reuters
German court rejects KNDS injunction to keep Triton from selling Renk shares
FRANKFURT, May 13 (Reuters) - A court in Frankfurt on Tuesday said it had rejected a request by Franco-German defence contractor KNDS for an injunction to block private equity group Triton Partners from selling shares in German tank gearbox maker Renk ( opens new tab. Sources familiar with the transaction told Reuters earlier on Tuesday that KNDS had taken legal action in a dispute over a contract with Triton to transfer Renk shares, as KNDS seeks to increase its stake in Renk.
Bloomberg
13-05-2025
- Business
- Bloomberg
KNDS Said to Sue Triton Over Refusal to Deliver 18% Renk Stake
KNDS NV has sued private equity firm Triton Partners for refusing to transfer a stake in key tank supplier Renk Group AG, according to people familiar with the matter. The Franco-German defense company on Monday filed a lawsuit at Frankfurt's regional court against Triton, demanding the investment firm deliver 18.3 million Renk Group shares, the people said. The move took place just hours before the Tuesday midnight deadline for the share transfer, the people said, declining to be identified because the information is private.
Reuters
07-05-2025
- Business
- Reuters
KNDS' bid to raise stake in tank gearbox maker Renk faces challenge, sources say
A view shows the logo of the French-German military defence system supplier KNDS inside their armament factory in Bourges, France, March 21, 2025. REUTERS/Sarah Meyssonnier/File photo Purchase Licensing Rights , opens new tab Companies RENK Group AG Follow May 7 (Reuters) - Franco-German defence contractor KNDS' plan to increase its stake in German tank gearbox maker Renk ( , opens new tab is facing a potential challenge from the designated seller of the shares, two people familiar with the matter told Reuters on Wednesday. Tank maker KNDS earlier this year exercised an option to raise its holding in Renk to 25.1% from 6.7% by purchasing shares from private equity group Triton Partners at terms that are now unfavourable for Triton because of a recent surge in Renk's shares. The Reuters Tariff Watch newsletter is your daily guide to the latest global trade and tariff news. Sign up here. Advertisement · Scroll to continue The Italian government has yet to give its clearance for the transaction, and KNDS and Triton disagree whether failure to win that approval on time would mean the deal falls through. According to Bloomberg News, which earlier reported on the dispute, a deadline for the transaction to be wrapped up ends next week. A KNDS spokesperson told Reuters that the company was confident it would win Italy's approval and that, in any case, the share purchase agreement was not contingent on Italy's go-ahead because Renk does not operate a plant in the country. According to a source familiar with the matter, Triton insists that the deal would fall apart if Italy's clearance doesn't emerge on time. Advertisement · Scroll to continue Triton declined to comment. Renk shares were down 3.5% at 1455 GMT, erasing gains on Monday and Tuesday. Reporting by Alexander Huebner. Writing by Ludwig Burger. Editing by Mark Potter Our Standards: The Thomson Reuters Trust Principles. , opens new tab Share X Facebook Linkedin Email Link Purchase Licensing Rights
Bloomberg
07-05-2025
- Business
- Bloomberg
Tank Maker KNDS Hits Snag in Buying Triton's Renk Stake
A plan by Franco-German defense company KNDS NV to become the biggest shareholder in key tank parts supplier Renk Group AG has hit a hurdle over disagreements about regulatory approval, according to people familiar with the matter. KNDS announced on Feb. 11 that it had exercised its option to buy Renk shares from Triton Partners, lifting its holding to 25% from 6.7%. The transaction was subject to merger control and other regulatory approvals, it said at the time.
