Sensor technology manufacturer, Hensoldt, has announced its acquisition of a systems integrator, ESG Elektroniksystem-und Logistik-GmbH from an investment vehicle managed by Armira on 5 December 2023.
Hensoldt’s two key shareholders – the German Government and Leonardo S.p.A – expressed full support of the German deal that is due to be completed in the first half of 2024.
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By GlobalDataThomas Müller, CEO of Hensoldt, explained: “The acquisition of ESG is an excellent fit with our overall strategy and accelerates Hensoldt’s development as a solution provider for defence and security. By combining highly complementary capabilities from Hensoldt and ESG, we are taking a decisive step towards becoming a leading European provider of seamlessly integrated solutions.”
More than 50-years-old, ESG has served the defence and security needs of German and foreign armed forces, public authorities and companies.
ESG has been able to establish itself as a strong German systems design and integration house, playing a vital role in major current and future programs such as FCAS (“Future Combat Air System”) and F-35 Lightning II programme.
Today, the company employs 1,380 people in Germany, the Netherlands and the USA with exceptional technological expertise.
For 2023, the company’s revenue is expected to be approximately €330m ($356.1m) in accordance with IFRS, with annual growth in the low double-digit percentage range and an EBITDA margin of approximately 14%, generating strong cash flows, with maintenance capex under 1.5% of revenue.
Bringing Hensoldt’s sensor solutions to a market set on integration
GlobalData deals intelligence tells us that the Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (C4ISR) is one of the largest sectors for deals this year to date, second only to the expansive Aerospace sector. The leading data and analytics consultancy indicates 131 C4ISR deals so far in 2023, already surpassing the 126 C4ISR deals made last year.
ESG brings expertise in intelligent data networks to integrate Hensoldt sensor systems across domains, creating critical integrated solutions for multi-domain operations.
Given the highly complementary skillsets, strong cultural fit and stakeholder support, the combined group is ideally positioned to accelerate its international growth based on the track records and growth trajectories of the two companies, while remaining firmly rooted in Germany and protecting national security interests.
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