THEON announces the acquisition of Harder Digital
Bloomberg (THEON:NA) / Reuters (THEON.AS)
Nicosia, 9 September 2024 – Theon International plc (THEON), is pleased to announce
the acquisition of a 60% controlling stake in Harder Digital group (Harder Digital), a
specialised manufacturer of Image Intensifier Tubes (IIT) mainly operative in Germany,
through a cash injection of €34 million. This is the first step in THEON’s efforts to secure
its supply chain with THEON also working on longer-term commercial agreements with
its key suppliers.
This acquisition, in line with the strategic priorities communicated during the IPO
process, comes at a critical time as global geopolitical conflicts and emerging threats
have put the supply and demand for Night Vision technology in a delicate balance, and
will bring multiple benefits to THEON, including:
• Enabling THEON to vertically integrate by insourcing a critical component of the
Night Vision value chain, enhancing operational security and flexibility.
• Giving THEON access to niche technologies, supporting the development of new
products through additional in-house R&D capabilities.
Notably, this expansion is not expected to compete with IIT produced and procured by
THEON’s existing suppliers, ensuring continued strong partnerships. THEON will also
continue and expand its cooperation with the other European and US IIT manufacturers.
The acquisition will be performed through a cash injection of €34 million, implying a mid-
single digit multiple of the expected EBITDA for 2026. The majority of the funds will be
deployed to upgrade Harder Digital production facilities and increase the capacity of 3rd
generation IIT manufacturing lines in Germany mainly and Latvia. The remaining funds
will be used to financially restructure the company.
Harder Digital, which is currently operating well below its full capacity, is targeting €17
million sales with 10% EBITDA margin in 2024. In the medium term, it is expected to
approximately triple sales by 2028, reaching a mid-twenties EBITDA margin at the time,
after restoring capacity and achieving economies of scale. This is also in line with the
anticipated increase in global demand which necessitates that THEON will be continuing
its long-term cooperation with the other tube manufacturers. THEON currently
purchases almost 50% of Harder Digital’s output, and this is envisaged to continue. The
remaining production will continue to be sold to third parties.
The transaction is subject to customary approvals from relevant regulatory authorities
and expected to close during the fourth quarter of 2024. The transaction is foreseen to be
fully financed with available cash that will be deployed over a two-year period.
Christian Hadjiminas, founder and CEO of THEON commented on the acquisition: “We
are delighted to announce the signing of our first sizeable M&A transaction which first
and foremost is a financially attractive acquisition. We have been partnering with
Harder Digital and its current management team for many years and we are pleased to
welcome them to the THEON family. This is the first step in implementing our inorganic
growth strategy communicated during the IPO process earlier this year. This acquisition
would allow us to achieve partial vertical integration in our core Night Vision business
segment and strengthen THEON’s presence in Germany and the Baltic region, some of
our key markets. The realisation of our global expansion is expected to continue with a
good pipeline of other potential acquisition targets already identified, including a number
of companies in Germany.
”
Harder Digital was established in 1999, having its HQ in Woltersdorf, Germany and
operating subsidiaries in Germany, Serbia and Latvia. Harder Digital has become one of
the few companies in the field of Image Intensification, covering a range of Gen I, Gen II
and Gen III as well as custom made IIT and components. Harder Digital exports its
products to over 30 countries globally.
THEON today also announces the H1 2024 results which can be found here. A webcast
will be taking place tomorrow, Tuesday, 10 September 2024, at 2:00 pm CET, with
THEON’s Executive Management team presenting the results, followed by a Q&A session.