TKMSa German warship manufacturer that became independent from its parent group. thyssenkruppplans to capitalize on an expected surge in European defense spending with “smart, profit-oriented growth” after listing on the Frankfurt stock exchange on Monday.
In its initial public offering, TKMS was launched at approximately 60 euros (approximately $70) per share, giving it a market value of approximately 3.8 billion euros (approximately $4.4 billion) and attracting strong demand from investors. Industrial engineering giant ThyssenKrupp will continue to hold a 51% stake in the company after the IPO.
The company, also known as ThyssenKrupp Marine Services, builds both submarines and surface ships, as well as electronics and software technology that TKMS CEO Oliver Burkhardt calls the company’s “jewels in the treasure chest.”
This includes sonar equipment and certain autonomous devices that are important in so-called “Mighty Domain” operations, which are “the next big thing in military warfare,” Burkhardt said Monday on CNBC’s “European Early Edition.”
The IPO will allow the company to raise capital and expand its production capacity as demand for defense capabilities is expected to increase in Europe over the coming decades, particularly in the naval sector.
The United States has 71 submarines, while Russia has an estimated 64. Germany, on the other hand, only has six ships and has six more on order.
Burkhard said TKMS had an order backlog of 18.6 billion euros, which would likely keep the company at full capacity into 2040, and that it typically takes five to 15 years to build one submarine.
TKMS has doubled its production capacity in recent years and now has two shipyards capable of building state-of-the-art submarines that can remain underwater for weeks at a time.
“With our capabilities, of course we can build the order book and take on other orders,” Burkhardt said, adding that the company is aiming for “smart, margin-oriented growth.”
He said the company benefits from a “robust” supply chain, about 90% of which is in Europe, mostly in Germany.
Thyssenkrupp shares were up 6.4% in recent trading. Stoxx European Aerospace & Defense Index rises about 2.7%, tank parts maker Lenk Defense technology companies up 6.5% Hensoldt 7.9% increase; line metal It recorded an increase of 5.8%.
Gareth McCartney, Global Co-Head of Equity Capital Markets UBSsaid TKMS’ public debut comes at a time when investors have significant liquidity and are demonstrating solid appetite for IPOs in the region.
“Defense and infrastructure spending has become very central to foreign investors looking to invest in Europe, and we’ve seen a catalyst in recent months,” McCartney told CNBC’s “Europe Early Edition” on Monday.
