German defence systems supplier Hensoldt has acquired defence systems integrator ESG Elektroniksystem for a total enterprise value of EUR 675 million and a potential earn-out of EUR 55 million.

With this acquisition, Hensoldt expects to achieve annual cost synergies of EUR 19 million and further revenue synergies through cross-selling and improved strategic positioning. To finance the acquisition, the company plans to use a capital increase of up to 10% of the existing share capital and new debt totalling EUR 450 million.

Founded in 1967, ESG operates as a systems integrator and technology partner to the defense industry. The company specializes in the development, integration, support and operation of complex electronic and IT security-related systems for defense and security purposes, meeting the needs of German and foreign armed forces, public authorities and enterprises. ESG employs 1,380 people in Germany, the Netherlands and the USA. The company's projected sales in 2023 are approximately EUR 330 million with an EBITDA margin of around 14%.

Based near Munich in Taufkirchen, Hensoldt specializes in the development of complex sensor solutions for defense and security applications. The company focuses on the development of defense electronics and optronics while expanding its portfolio with innovative approaches in the fields of data fusion, artificial intelligence and cybersecurity. Hensoldt employs more than 6,500 people, achieved sales of €1.7 billion in 2022 and is listed on the MDAX in Frankfurt.