The defence group KNDS has locked in a roughly £1bn order for 72 RCH 155 howitzers from the British Army, giving its planned summer IPO a tangible demand signal just as it cleared a final compliance hurdle. The contract, awarded by OCCAR to the ARTEC joint venture with Rheinmetall, includes first deliveries from 2028 and will create hundreds of jobs across the UK supply chain. The firm order contrasts with the company’s ongoing efforts to convert former car factories into arms production lines – a capacity race that will define whether it can turn its ballooning order book into revenue.
The compliance clearance came after PwC agreed to sign off on the 2025 financial statements, ending months of uncertainty. The auditor had withheld its approval pending a report from law firm Freshfields into a 2013 Qatar defence deal. Freshfields found no evidence of criminal wrongdoing, and PwC has now signalled it will certify the accounts – a prerequisite for any listing. With that obstacle removed, KNDS is targeting a debut on the Frankfurt and Paris exchanges in June or July, with September as a fallback.
Four banks – Bank of America, Deutsche Bank, Goldman Sachs and Société Générale – are managing the dual listing. They have slashed the valuation range from an initial €25bn to between €18bn and €20bn. The German state plans to take a 40% stake via KfW at the IPO price, reducing to 30% over two to three years. Only 20% of the equity is being placed, leaving a thin free float that could deter some institutional investors.
The UK order is part of a broader artillery push. In North America, the RCH 155 has been submitted for the US Army’s Mobile Tactical Cannon programme alongside American Rheinmetall, with a prototype winner potentially named in July 2026. In Canada, General Dynamics Land Systems–Canada unveiled the Grizzly LAV 155 at CANSEC 2026, fitted with a KNDS turret and 155mm gun, though no award has been made yet. Both programmes showcase the system’s technology in key NATO modernisation efforts.
Should investors sell immediately? Or is it worth buying KNDS?
KNDS’s financial momentum supports the IPO narrative. Revenue rose 15.9% to €4.4bn in 2025, while operating earnings (EBIT) climbed to €661m, lifting the margin from 13.2% to 15%. New orders of €13.5bn – including more than 300 Leopard 2A8 tanks for Czechia, the Netherlands and Croatia, plus Caesar howitzers – swelled the backlog to €33.1bn, up from €23.5bn at the end of 2024. Management forecasts another 20% revenue increase for 2026.
To bridge the gap between orders and output, KNDS is in talks with Volkswagen and Mercedes-Benz about taking over factories in Osnabrück and Ludwigsfelde. CEO Jean-Paul Alary confirmed negotiations late last month. At the Mercedes site near Berlin, Sprinter vans could continue on one line while Boxer armoured vehicles are assembled on another. VW chief Oliver Blume described the Osnabrück discussions as “promising”. No contracts have been signed, and converting automotive plants to weapons production requires heavy investment and time.
The UK contract specifically supports the Boxer production line. The howitzer’s Boxer drive module with chassis, engine and drivetrain will be built at KNDS UK in Stockport. The programme is expected to generate 100 skilled jobs at Rheinmetall’s Telford site, another 100 at KNDS Stockport and 300 in the broader British supply chain.
For investors, the IPO tests appetite for a state-controlled defence group with limited free float but record orders and multi-country traction. The prospectus will need to address governance risks. The real test, however, is whether KNDS can convert its €33bn backlog into serial production – and whether shuttered car plants can indeed become modern weapons factories. The UK order and North American offers provide a concrete product story, but execution remains the critical variable.
Ad
KNDS Stock: Buy or Sell?! New KNDS Analysis from June 6 delivers the answer:
The latest KNDS figures speak for themselves: Urgent action needed for KNDS investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from June 6.
KNDS: Buy or sell? Read more here...
