KKR sells minority stake in Hensoldt

Harriet Matthews
26 April 2021

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KKR has sold a 25.1% stake in Germany-based defence and security sensor developer Hensoldt to Italy-headquartered Leonardo, an aerospace, defence and security company.

The stake is valued at around €606m, Leonardo said in a statement.

The closing of the deal is expected in H1 2021.

Hensoldt said in a statement that the addition of Leonardo to its shareholder base will bring in the company as a strong potential strategic partner.

Hensoldt completed an IPO in September 2020, following which KKR retained a stake of 60%. KKR will still hold a stake of around 18% in Hensoldt via Square Lux Holding II following the deal, according to a statement.

The GP also sold a 25.1% stake to the German federal government, via KfW, in March 2021. Reuters reported that the deal would value the stake at €464m.

Hensoldt issued a statement earlier in April 2021 confirming that KKR was in talks to sell a further stake in the business, with parties involved including Leonardo, Indra, Saab and Thales.

Previous funding
KKR acquired Hensoldt (then known as Defence Electronics) from Airbus in March 2016 in a deal that valued the company at €1.1bn, equating to an entry multiple of around 12.2x. The GP was deploying equity via KKR European Fund IV at the time of the investment. The vehicle held a final close in December 2015 on €3.3bn and its investment period ended in March 2019, according to Unquote Data.

According to Unquote sister publication Debtwire, a consortium comprising UniCredit, IKB Deutsche Industriebank, Commerzbank, SMBC Capital, Deutsche Bank, Crédit Agricole, Mizuho Corporate Bank and Idinvest Partners provided €875m in debt to back the deal.

Hensoldt listed on the SDAX component of the Frankfurt stock exchange in September 2020, as reported, with its shares priced at €12-16 apiece, implying a total market capitalisation of €1.26-1.58bn and an enterprise value of €2.29-2.61bn. At the time of publishing, its shares were trading at €16.4 apiece.

Company
Hensoldt was formed in 2017 following its carve-out from Airbus. Headquartered in Taufkirchen, the company produces sensors for use in the defence and security sectors. Hensoldt specialises in ISR (intelligence, surveillance and reconnaissance) sensors, electromagnetic sensors and mission avionics systems. The business generated 2020 revenues of €1.2bn and employs 5,400 staff. It posted adjusted EBITDA of €215.6m in 2019 against revenues of €1.1bn.

People
Hensoldt – Thomas Müller (CEO).
Leonardo – Alessandro Profumo (CEO).

Advisers
Acquirer – UBS (corporate finance); Deutsche Bank (corporate finance); Clifford Chance (legal).