Renk IPO aims for market capitalization of up to 1.8 billion euros

By Emma-Victoria Farr

FRANKFURT (Reuters) -German defence contractor Renk said on Monday it would price its initial public offering (IPO) at 15 to 18 euros per share, which would give it a potential valuation of up to 1.8 billion euros ($1.92 billion).

Private equity owner Triton, which has been an investor since 2020, will continue to hold its majority stake in Renk, which supplies gearboxes for Germany's Leopard battle tank.

Triton plans to sell up to 27.03 million Renk shares, raising between 405 and 486 million euros in proceeds. Renk's free float would be 27%, according to a company statement.

The offer period is expected to start on Tuesday and end on Oct. 4, with Renk to go public on the Frankfurt Stock Exchange on Oct. 5.

Renk's IPO comes hot on the heels of German medical glass producer Schott Pharma which plans to start trading in Frankfurt on Thursday, reflecting improved sentiment for new stocks.

Renk expects to post revenues of up to 1 billion euros ($1.07 billion) for 2023 with an EBIT margin as high as 17%, and expects these to grow in the coming years, according to its IPO announcement.

"We see strong momentum in our core business and, via the IPO, intend to tap further options for supporting our growth," said Susanne Wiegand, CEO of Renk.

Citigroup, Deutsche Bank and JP Morgan are organising the IPO transaction.

Headquartered in Augsburg, Renk controls more than 30% of the market for transmissions for military vehicles globally, according to its announcement. Defence makes up the bulk of its revenue but the group also provides products for civil use.

($1 = 0.9394 euros)

(Reporting by Emma-Victoria Farr, Writing by Rachel More and Amir Orusov; Editing by Kim Coghill and Bernadette Baum)