Fjord Defence Group (DFENS) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of 99% of Fjord Defence aligns with a strategy to become a listed defence compounder focused on profitable, established businesses and fast-growing companies in the sector.

• Repositioning under new leadership and rebranding as Fjord Defence Group ASA, with Fjord Defence's founder Jon Asbjørn Bø appointed as CEO, to pursue further acquisitions and organic growth.

• The strategy targets NOK 2 billion in defence revenue within 3-4 years through organic growth and acquisitions.

• Fjord Defence brings a strong niche position in weapon integration solutions, with a track record of profitability and an international customer base.

• The deal leverages market tailwinds from increased European and NATO defence spending and a multi-year upcycle for niche defence suppliers.

Financial terms and conditions

• Enterprise value of Fjord Defence is NOK 178.2m, including NOK 8m net debt; equity value is NOK 170.2m, with NOK 140m settled in shares at NOK 0.80/share and NOK 30m in cash.

• Fjord Defence shareholders receive about 38% of the combined entity post-transaction and private placement; settlement shares are subject to a 3-year lock-up, released in thirds annually.

• Aquila to raise NOK 85m in new capital: NOK 60m equity via private placement (significantly oversubscribed) and NOK 25m new debt facility.

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

• NOK 9m shareholder loan repaid as part of the transaction.

Synergies and expected cost savings

• Buy & Build/compounder strategy aims to unlock growth for small and medium defence suppliers by providing access to capital, best practice sharing, and leveraging commercial networks, enabling 2-3x revenue and profit growth over 3-4 years.

• Acquired companies will operate as stand-alone entities, supported by the group’s board.