KKR's Hensoldt sets IPO share price at €12-16

Harriet Matthews
16 September 2020

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Electronic sensor producer Hensoldt, a KKR portfolio company, has set the share price for its planned IPO at €12-16, implying a total market capitalisation of €1.26-1.58bn and an enterprise value of €2.29-2.61bn.

Unquote sister publication Mergermarket reported that KKR is expected to float up to 30% of Hensoldt's share capital. Press reports that KKR was considering an exit from Hensoldt via an IPO or sale first began to circulate in September 2019.

The offer size amounts to 33,333,333 shares and could be increased to a maximum of 45,808,333 shares, according to a statement.

The offer will comprise up to 25,000,000 newly issued bearer shares issued via a capital increase, which will target gross proceeds of €300m. Up to 8,333,333 existing bearer shares will also be issued, targeting gross proceeds for the selling shareholders of €100m. The exact number of shares is subject to the offer price, Hensoldt said in the same statement.

Up to 6,500,000 existing shares with no par value from the holdings of the selling shareholder will also be issued as additional base shares, along with 5,975,000 overallotment shares from the selling shareholders. Up to €165m could be generated from the sale of these shares.

The first day of trading for the shares is expected to be 25 September 2020.

Hensoldt intends to use the IPO proceeds to support its growth, as well as to achieve net leverage of around 3x by the end of 2020

Bank of America Securities, JP Morgan, KKR Capital Markets and Deutsche Bank are acting as joint global coordinators, while Citigroup, Commerzbank, UniCredit and Crédit Agricole will act as joint bookrunners. Mizuho International is acting as co-manager.

KKR acquired the Taufkirchen-based electronic defence and security sensor producer (then known as Defence Electronics) from Airbus in a deal valued at €1.1bn in March 2016. According to Unquote sister publication Debtwire, a consortium including UniCredit, IKB Deutsche Industriebank, Commerzbank, SMBC Capital, Deutsche Bank, Crédit Agricole, Mizuho Corporate Bank and Idinvest Partners provided debt financing of €875m to support the deal.

At the time, the GP was deploying equity via KKR European Fund IV, which held a final close in December 2015 on €3.3bn. The vehicle was 99% deployed as of September 2019 and its investment period ended in March 2019, according to Unquote Data.