As defense supplier VINCORION prepares for its Frankfurt Stock Exchange debut this Friday, its share offering has been met with unexpectedly robust investor appetite. The banks managing the initial public offering reported multiple oversubscription on the very first day of the bookbuilding period, which concluded on Thursday. This keen interest is primarily attributed to the company’s substantial order backlog and its position in a highly profitable market niche.
A Valuation Built on Recurring Revenue
The company’s appeal to institutional investors is grounded in significant operational improvements. For the 2025 fiscal year, VINCORION increased its revenue by 18 percent to 240.3 million euros. Its net profit simultaneously doubled, reaching 19.4 million euros.
A crucial, yet often overlooked, component of this performance is the maintenance and spare parts division, known as the aftermarket. This segment contributes 55 percent of total revenue. Given the long-term servicing requirements of military equipment, this business generates stable and above-average profit margins, which help to cushion the more volatile nature of new equipment sales.
Further underpinning the investment case is an order book valued at approximately 1.1 billion euros. This backlog, linked to VINCORION’s role as a supplier for major defense systems like the Leopard 2 battle tank and the Iris-T SLM air defense system, effectively secures near-total production capacity for the next four years.
A Secondary Offering with Anchor Support
Despite these strong operational metrics, the IPO itself will not inject fresh capital into the business. The listing is structured as a pure secondary share sale. The majority owner, Star Capital, stands to receive up to 345 million euros while retaining a stake of just under 60 percent post-IPO. With a total company valuation set at 850 million euros, the financial investor achieves a sixfold return on the price it paid to Jenoptik four years ago.
The structure has not deterred buyers, as evidenced by firm commitments from several anchor investors. Fidelity International, Invesco Asset Management, and T. Rowe Price have collectively pledged 105 million euros, securing close to one-third of the offered shares.
Starting with its first day of trading on March 20, VINCORION’s management will face the task of demonstrating that its operational performance can justify the high valuation over the long term. With no growth capital entering the corporate treasury, future shareholder returns will depend entirely on the margin development of the existing order book and the smooth issuance of necessary government export licenses.
