Milbank LLP advised HENSOLDT AG (“HENSOLDT”) on the financing of the acquisition of ESG Elektroniksystem- und Logistik-GmbH (“ESG”). Adding ESG’s solution portfolio will enable HENSOLDT to combine knowledge of concepts of operations, certifications and engineering know-how to develop smarter and faster solutions, in particular in the digitalization of the battlefield and development of integrated network solutions. ESG will remain firmly rooted in Germany and thereby protect national security interests. The transaction is valued at an enterprise value of EUR 675 million plus an earn-out of up to EUR 55 million based on achieving specific performance targets by 31 December 2024, implying an EV/EBITDA 2024E of approximately 10x post run-rate cost synergies. The transaction is subject to regulatory approval and expected to close in H1 2024.
HENSOLDT is a leading company in the European defence industry with global reach. Based in Taufkirchen near Munich, the company develops complete sensor solutions for defence and security applications. As a technology leader, HENSOLDT drives the development of defence electronics and optronics and is continuously expanding its portfolio based on innovative approaches to data fusion, artificial intelligence and cybersecurity. With more than 6,500 employees, HENSOLDT achieved a turnover of EUR 1.7 billion in 2022. HENSOLDT is listed in the MDAX on the Frankfurt Stock Exchange.
ESG is one of the leading German companies for the development, integration, maintenance, support and operation of complex, safety-relevant systems, mission equipment, software and IT.
The Milbank team that advised HENSOLDT on the financial and tax aspects of the transaction, was led by partner Thomas Ingenhoven (Finance, Frankfurt) and included partner Thomas Kleinheisterkamp (Tax, Munich) as well as special counsel Thomas Möller (Finance, Frankfurt) and Tristram Gargent and associates James Szauer (both Finance, London), Robin Braun (Finance, Frankfurt), Cosmos Fung (Tax, London) and Elisabeth Wöhrle (Tax, Munich).
