Czech defence group CSG plans Amsterdam listing to tap military spending surge

Adds analyst comment, banks, CSG outlook, graphics

By Jan Lopatka and Jason Hovet

PRAGUE, Jan 14 (Reuters) - Czech defence company Czechoslovak Group plans to float on Euronext in Amsterdam, it said on Wednesday, riding a wave of global military spending in what could become the largest-ever defence listing by funds raised.

CSG, one of the world's fastest-growing defence firms, said the offering was expected to take place in the coming weeks and would consist of 750 million euros ($873.60 million) of new shares and a yet-to-be-determined number of existing shares.

Europe's defence stocks have hit record highs recently as investors pile into the sector following the 2022 invasion of Ukraine and rising global unrest from Venezuela to Iran.

Sources, asking not to be named, have told Reuters the IPO could raise more than 3 billion euros ($3.50 billion). That would make CSG Amsterdam's largest IPO since InPost in 2021, which raised $3.9 billion, according to Dealogic data.

Chair and current sole owner Michael Strnad told Reuters last week that CSG was considering listing 15% of its shares, though no decision had yet been made.

CSG, which makes artillery and handgun ammunition as well as trucks, armoured vehicles and electronics and whose key customers include Ukraine, said it would use proceeds from the sale of new shares for general corporate purposes.

IPO TO ELEVATE PROFILE AND FUNDING

Strnad said in a statement on Wednesday CSG, which says it is the second-largest European maker of large-calibre ammunition, would benefit from the acceleration in global defence spending.

NATO countries have increased outlays since U.S. President Donald Trump returned to office, and CSG expects the trend to continue even if the war ends in Ukraine, which accounted for a third of revenue in 2024.

"We believe an IPO of CSG would elevate the profile of the group within the international investment community, providing additional financial flexibility and diversity of funding sources to support further growth," Strnad said.

CSG said it had received cornerstone commitments from funds under management with Artisan Partners and BlackRock, and Al-Rayyan, a wholly owned subsidiary of Qatar Investment Authority, for an aggregate amount of 900 million euros, subject to completion of the IPO.

"The timing is clearly supportive given record sector valuations. On the investor line-up there is still limited disclosure, so it is hard to read too much into it at this stage," said Jens-Peter Rieck, analyst at mwb research.

BNP Paribas BNPP.PA, Jefferies JEF.N, JPMorgan JPM.N and UniCredit CRDI.MI are global coordinators for the IPO.

DEFENCE STOCKS TOUCH RECORD HIGHS

Other European defence companies, including Franco-German tank maker KNDS, are also exploring listings this year.

European arms makers' shares have already touched record highs and were pushed higher by Trump's call last week for higher U.S. defence spending.

Strnad declined to comment when asked by Reuters last week on valuation, but cited defence giant Rheinmetall <RHMG.DE>, as a guide, though he expected some discount versus the German group. This would still imply a valuation in lower tens of billions of euros.

Strnad, 33, has rapidly expanded the business set up by his father into a global company, including through the $2.2 billion purchase of U.S. small ammunition maker Kinetic.

CSG's revenue rose to 4.5 billion euros in the first nine months of 2025, an 82% year-on-year rise on a pro-forma basis, while operating earnings before interest, tax, depreciation and amortisation increased 79% to 1.2 billion euros.

CSG predicted in November last year that its revenue would rise to 7.4-7.6 billion this year, and operating profit margin would remain at 24%-25%.

It said on Wednesday it would target a dividend payout of 30%-40% of net profit, payable from 2027.

($1 = 0.8581 euros)

(Reporting by Jan Lopatka and Jason Hovet, additional reporting by Michael Kahn; writing by Charlie Conchie; Editing by Susan Fenton, Barbara Lewis and Jane Merriman)

((jason.hovet@thomsonreuters.com;))