Published by Global Banking and Finance Review
Posted on September 2, 2025
By Jan Lopatka
PRAGUE (Reuters) -Fast-growing Czech-based defence company Czechoslovak Group (CSG) is considering an initial public offering of its shares, the company said on Tuesday, a deal that could value the group at tens of billions of euros based on its financial performance.
CSG, owned by a 33-year old entrepreneur Michal Strnad, has seen rapid growth amid soaring demand for ammunition and military equipment since Russia's invasion of Ukraine in 2022 and a public offering would be a major transaction amid soaring valuations of the defence sector.
The company is among top European makers of artillery ammunition for NATO countries and Ukraine and among leading global makers of small-calibre ammunition for handguns after its $2.2 billion acquisition of U.S.-based Kinetic Group last year.
CSG has also rapidly expanded its division producing and modernising heavy military equipment including artillery, armoured vehicles and trucks.
"The Group is in the early stages of evaluating potential strategic alternatives to support its continued growth strategy," CSG said in a half-year report on Tuesday.
"These alternatives include further possible capital markets transactions, including potentially, in due course, an IPO on a regulated market."
CSG said no decisions had been made yet.
A person familiar with the matter said JP Morgan was among banks working on the potential offer and that no transaction was likely this year. JP Morgan declined to comment.
CSG, which has around 14,000 employees and over 100 subsidiaries, competes with Germany's Rheinmetall, KNDS or General Dynamics in the large-calibre ammunition business, its largest segment.
The group reported revenue of 2.8 billion euros ($3.3 billion) in the first half of this year, core profit before interest, tax, depreciation and amortisation of 0.8 billion euros, and net debt of just under 3 billion euros.
Based on its financial performance and its rivals' market valuations, CSG could have enterprise value, or market capitalisation plus net debt, of 23 to 40 billion euros.
J&T Banka analyst Jan Ryska said CSG was benefiting from soaring European defence sector stock valuations.
"CSG made an early decision to increase production and go for acquisitions abroad, which is now yielding both organic and inorganic growth," and strong margins, Ryska said.
CSG reported an order backlog of 14 billion euros, and a 14-billion euro pipeline of projects in various stages of negotiation.
Apart from Kinetic, it acquired IFF's nitrocellulose plant in Germany last year and formed a joint venture with the state-owned HDS company in Greece for ammunition production.
In the United States, it produces ammunition under brands such as Federal or Remington.
CSG issued $1 billion and 1 billion euros in bonds in June to restructure its debt at lower interest.
($1 = 0.8542 euros)
(Reporting by Jan Lopatka, additional reportiong by Jason Hovet and Anousha SakouiEditing by Peter Graff and Tomasz Janowski)
