Michal Strnad's industrial group Czechoslovak Group a.s. is reportedly one step away from going public. According to Bloomberg, the Czech defense giant is already in the process of selecting banks to lead its initial public offering. CSG is seeking a valuation of €30 billion, which would make it one of the most valuable companies in Europe in this sector. The initial public offering is expected to take place in Amsterdam, with a possible additional listing in Prague. This should happen as early as next year.

The CSG Group is facing another milestone – at least according to confidential sources cited by Bloomberg. It reported that the Czech arms giant has commissioned BNP Paribas, Jefferies Financial Group, JPMorgan Chase & Co. and UniCredit to secure bids for an IPO, a process whereby a company first enters the stock market and offers its shares to the general public. In the past, the group has worked with BNP Paribas, JPMorgan, and UniCredit on the sale of junk bonds, which are bonds with higher risk for potentially higher returns.

According to Bloomberg, Czechoslovak Group is seeking a valuation of €30 billion, or CZK 736.5 billion, in its initial public offering. This would make it larger than ČEZ, the largest electricity producer in the Czech Republic. “Within the sector, CSG would rank among the largest traded players in Europe. In terms of size, it would surpass Swedish Gripen manufacturer Saab and Italy's Leonardo,“ Patria Finance chief analyst Tomáš Vlk told Seznam Zprávy. “Britain's BAE Systems would remain about twice as large, while Germany's Rheinmetall would be about two and a half times larger than CSG,“ Vlk added, comparing it to Europe's largest arms manufacturers.

The IPO could take place in Amsterdam with a possible dual listing in Prague as early as next year. “No final decision has been made yet, negotiations are in the early stages and the company could decide against an IPO,“ warned sources who wished to remain anonymous, according to Bloomberg. At the same time, other as yet unnamed banking institutions could also help. Representatives of BNP Paribas, Jefferies, JPMorgan, UniCredit, and CSG have so far declined to comment.

CSG's business has been transformed due to the war in Ukraine and a number of contracts and acquisitions in recent years. During its cooperation with European and Ukrainian partners, the group's revenues and profits have risen sharply. According to Bloomberg, Czechoslovak Group will now seek to capitalize on momentum across Europe thanks to increased defense spending and the necessary rearmament of partner armies within the North Atlantic Alliance.

According to last year's annual report, Ukraine accounted for 42.8% of the company's sales. CSG delivered one million pieces of artillery ammunition, part of which was made possible by a Czech government initiative joined by a number of European allies. A year before the start of the full-scale Russian invasion, CSG reported earnings before interest, taxes, depreciation, and amortization of CZK 2.7 billion – last year, its profit climbed to EUR 1.1 billion, or over CZK 27 billion. More recent data is not available and may be significantly higher given the dynamic developments in this sector.

Since its establishment in 1995, Czechoslovak Group has become one of the largest private defense companies in Europe. Michal Strnad took over ownership from his father Jaroslav in 2018, three years after becoming chairman of the board of directors. Most recently, in June this year, the company announced the successful sale of senior secured bonds, which will bring in USD 1 billion and EUR 1 billion, maturing in 2031.

“We are thrilled by the strong investor interest and demand, which significantly exceeded supply. This confirms the correctness of our business and financial strategy and commits us to its further development,“ wrote CSG Chief Financial Officer Zdeněk Jurák in a statement at the time. “This milestone strengthens our financial position and supports our commitment to delivering innovative solutions in defense, aviation, and other industrial sectors. The favorable conditions of this issue underscore the growing recognition of the importance of the defense industry and CSG's leading position in it,“ Jurák added.