The tank transmission manufacturer Renk would like to return to the stock market in 2023. For the defense company, which is celebrating its 150th birthday this year, it would be the second IPO in the company’s history.
Exactly 100 years after its first IPO in 1923, the drive specialist and armaments company Renk wants to go public for the second time. The goal is an IPO by the end of 2023, depending on market conditions. The Augsburg company announced today that an application should be made for the shares to be admitted to trading on the regulated market of the Frankfurt Stock Exchange (Prime Standard).
There is usually a gap of around four weeks between the official announcement of an IPO, the so-called “Intention To Float” (ITF), and the first day of trading. An IPO could therefore take place by mid-October.
A public offering in Germany and private placements with institutional investors in other countries are planned. Renk CFO Christian Schulz expects the IPO to provide access to additional financing instruments for growth. For CEO Susanne Wiegand, it is the next logical step on the growth path.
Second IPO after 100 years
Renk was already on the stock market from 1923 to 2020 before it was taken over by the financial investor Triton for 700 million euros and taken off the stock exchange three years ago. According to its own information, the investment company specializes in medium-sized companies in the areas of services, healthcare, consumer goods and industry. It was said that Renk was aiming for a relevant free float. Triton wants to remain the majority owner for now.
The defense business with gearboxes for tanks or ships for the navy accounts for 70 percent, while the rest is made up of civilian business, for example with gearboxes for compressors. The former MAN subsidiary is the world market leader in tank transmissions. Bankers had recently estimated the valuation at 2.5 billion euros.
Special boom thanks to “Turning of Times”
Renk is currently experiencing a special boom: in the first half of the year, the company increased sales by 7.9 percent to 410 million euros, and adjusted operating profit climbed by 5.5 percent. In 2022, the company earned 144.3 million euros with sales of 849 million euros. Revenues of 900 million to one billion euros are expected for the current year, and the profit margin is likely to be 16 to 17 percent. In the medium term, sales are expected to increase by ten percent and the profit margin to rise to 19 to 20 percent.
At the end of the first half of the year, Augsburg had orders worth 1.7 billion euros on the books – according to the company, a record level. “The global need for technological renewal of the armed forces as a result of the changing times will continue to be a driver of our growth in the future,” said CEO Wiegand.
Renk employs more than 3,400 people and operates production facilities in Germany, the USA, Switzerland, Great Britain and France. There are also locations for technical support and maintenance. More than 70 armies and more than 40 navies and coast guards rely on Renk products, the company says.
Not an easy environment for IPOs
The current environment is currently not optimal for IPOs, as the stock markets are moving sideways in a volatile manner and investors are acting cautiously due to economic concerns and the central banks’ uncertain interest rate policy. However, management is likely to rely on the current high demand for defense equipment to have a positive effect on the Renk IPO. Additionally, market conditions can change at any time.
So far this year, Nucera has stood out in Germany. The industrial group Thyssenkrupp took its hydrogen subsidiary public in July. The issue raised a good 600 million euros. According to insiders, the Douglas perfumery chain is planning to return to the stock market. The pharmaceutical supplier Schott is also aiming for a stock market debut this year.