Fjord Defence Group (DFENS) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of 99% of Fjord Defence aligns with a strategic repositioning toward becoming a listed defense sector compounder, leveraging market momentum, industry expertise, and a strong niche in weapon integration solutions.

• The group will be rebranded as Fjord Defence Group ASA, with Fjord Defence's founder appointed CEO, and will pursue further acquisitions and organic growth.

• The strategy targets NOK 2 billion in revenue within 3-4 years through organic and acquisition-driven growth, capitalizing on a projected 10–20 year upcycle in defense spending.

• The group aims to consolidate niche defense suppliers under a listed entity, supporting both organic and acquisition-driven growth.

• Fjord Defence brings a profitable track record and international customer base, enhancing the group’s market position.

Financial terms and conditions

• Enterprise value for Fjord Defence is NOK 178.2 million, including NOK 8 million net debt; NOK 170.2 million paid for equity.

• NOK 140 million of the settlement is in shares at NOK 0.80/share, NOK 30 million in cash, and NOK 9 million shareholder loan repaid; Fjord Defence shareholders will own about 38% of the new group, with shares subject to a 3-year lock-up, released in thirds annually.

• Aquila raised NOK 85 million in new capital: NOK 60 million in a private placement (significantly oversubscribed), NOK 10 million in a repair issue, and NOK 25 million in acquisition financing.

• New debt facilities from Nordea include a NOK 25 million term loan, NOK 30 million M&A loan, and NOK 30 million overdraft.

• Completion is subject to EGM approval, registration, and NFSA prospectus approval; shareholders holding 71.76% of votes have committed support.

Synergies and expected cost savings

• The compounder model aims to unlock growth for small and medium defense suppliers by providing access to capital, best practice sharing, and leveraging commercial networks.

• Acquired companies will operate as stand-alone entities, supported by the group’s board, retaining operational independence and minimizing integration disruptions.