Theon International Enters Exclusive Agreement to Acquire HGH Infrared Systems for Approximately €300M
Theon International has signed an exclusive agreement with Carlyle to acquire HGH Infrared Systems, a French subsidiary specializing in electronic optics and infrared defense. Valued at approximately €300M, the transaction accelerates the Greek group's growth in multi-domain reconnaissance solutions and anti-drone warfare.
A €300M French Asset to Strengthen Platform Optics
Theon International has concluded an exclusive agreement to acquire HGH Infrared Systems, a company founded in 1982 and based in France. Employing over 130 people and generating approximately €40M in annual revenue, the company designs and markets electronic optics and infrared systems for defense and civilian applications.
The acquisition is structured at an EV/EBITDA multiple between 13 and 18 times before synergies, reduced to about 10 times after the full impact of the synergies envisaged in year 2 to 3. HGH has an EBITDA margin over 40% and has recorded a revenue growth of nearly 30% on a cumulative annual basis since 2023.
HGH's order book was approximately €70M at the time of signing the agreement. The transaction is expected to improve EBITDA margin and increase earnings per share by a mid-single-digit percentage in 2027.
HGH Brings Proprietary AI Capabilities and ITAR-Free Technology
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HGH possesses a portfolio of proprietary patents and recognized expertise in the automatic detection and classification of long-distance threats. The technology is based on artificial intelligence and augmented intelligence software, designed to offer advanced differentiation capabilities in surveillance and drone detection.
These platform optics solutions complement Theon's existing offerings and strengthen its multi-domain reconnaissance (ISR) product range. The acquisition follows several other strategic operations recently announced: the acquisition of Kappa Optronics, investment in ShockEOS, the selection of Theon's Phylax gimbal by Rheinmetall, and a joint venture with Safran to create drone optics solutions.
Funding Through Bridge Loan and Expected Closure in the Fourth Quarter of 2026
The transaction will be financed by a bridge loan provided by BNP Paribas, intended to be fully refinanced by debt. No capital increase is anticipated. The management team and employees of HGH will remain within the company and will be incentivized to continue commercial performance.
The completion of the agreement is subject to the fulfillment of mandatory procedures with the French Economic and Social Committee (CSE) as well as usual regulatory approvals. The closure is expected in the fourth quarter of 2026.
Strong H1 performance and positive momentum continuing into H2 2026 with further acceleration expected in Q4.
Risks mentioned
Integration of newly acquired businesses represents execution risk
Market expansion into high-growth adjacencies requires successful product development and market acceptance
Working capital absorption at 40% of LTM revenues indicates continued working capital pressure
Opportunities identified
Expansion into high-growth adjacencies increasing addressable market to nearly €8 billion
Integration of newly acquired businesses to drive future growth
Strong seasonal second half weighting supporting continued momentum into Q4 2026
Outlook / guidance
Expected revenue: 600 millions d'euros
Management commentary: THEON's Management team will also provide an update on FY 2026 and medium-term guidance during the webcast tomorrow. FY 2026 Guidance: Revenue c.€600 m; Adjusted EBIT Margin >26%; Capex €30 m; Medium-Term: Organic Growth >15%p.a.; Capex c. 4% of Revenue.
The information presented in this article is provided for informational purposes only and does not constitute an investment recommendation, an incentive to buy or sell a financial asset, or investment advice. Readers are invited to conduct their own research before making any decision.
Investments in the stock market involve risks, including the risk of capital loss. Past performance of an asset or market is no guarantee of future results. Any investment decision should be made taking into account your personal financial situation, objectives and risk tolerance.
