Czech Defense Firm CSG Aims for Global Expansion as It Prepares Major Amsterdam IPO

Czech defense firm CSG is preparing for a potential initial public offering in Amsterdam that could raise over $3 billion. The company, known for manufacturing artillery ammunition and armored vehicles, is looking to list up to 15% of its shares. The IPO would be one of the largest European defense listings of 2026.

The move comes as defense spending across Europe accelerates in response to Russia’s war in Ukraine and regional tensions. CSG, which saw its 2024 revenue nearly nine-fold from 2021 levels, is leveraging strong investor interest in the sector. The firm forecasts revenue of 7.4 billion to 7.6 billion euros in 2026 and has an order backlog of 14 billion euros.

CSG’s IPO could be announced as soon as early January. The firm’s owner and CEO, Michal Strnad, said the company is evaluating whether market conditions are right to proceed. The offering would likely take place on the Euronext Amsterdam stock exchange.

Why Did This Happen?

CSG’s decision to go public is driven by its rapid growth and the need to fund future expansion. The company has pursued several acquisitions, including the $2.2 billion purchase of U.S. small-ammunition maker Kinetic Group in 2024. Strnad emphasized the importance of vertical integration, aiming to control key parts of the supply chain to maintain margins.

The IPO would also provide a new tool for CSG in its M&A strategy. Strnad said he wants to use shares as currency for potential acquisitions, reducing the need for debt or cash. The company is also looking at sites in North Carolina and Wisconsin to expand its U.S. production.

How Did Markets React?

Defense stocks have gained traction amid heightened geopolitical tensions and increased European military spending. Strnad cited German defense firm Rheinmetall as a valuation benchmark but expected CSG to trade at a discount. If valued using Rheinmetall as a guide, CSG could be worth between 34 billion and 50 billion euros, according to Reuters calculations.

CSG’s potential listing is part of a broader trend in European defense markets. Other companies, such as Franco-German tank maker KNDS, are also considering IPOs in 2026. The sector has benefited from NATO spending commitments and rising demand for military equipment.

What Are Analysts Watching Next?

Analysts are monitoring whether the current surge in defense demand will be sustained. While CSG’s growth is tied to large-calibre ammunition and military vehicles, there are concerns about a shift in warfare toward drones and hypersonic missiles. Jens-Peter Rieck of mwb research noted that a peak in revenues could follow if the nature of warfare changes.

Investors are also keeping an eye on the impact of a potential peace deal in Ukraine. CSG’s 2024 revenue included a third from Ukraine-related contracts. A shift in demand could affect CSG’s growth trajectory. However, Strnad remains optimistic about long-term defense spending.

The IPO timing is critical. Strnad and CSG are aware of market conditions and are likely to delay the offering if they believe the valuation is not right. The company is still evaluating the size and structure of the deal.

CSG’s expansion strategy includes partnerships and investments in new markets. Recent deals include large-calibre ammunition production in Spain, a nitrocellulose company in Germany, and a joint venture in Greece for ammunition production. The company signed a framework deal with Slovakia's defense ministry in December, aiming for a multi-billion euro pipeline of contracts.

The IPO would also signal CSG’s ambition to become a truly global defense firm. Strnad said the company wants to expand into areas like jet engines for drones and missiles, aligning with NATO’s evolving needs.

CSG’s IPO could reshape the European defense landscape. By raising funds and gaining access to new markets, the company is positioning itself to compete with larger rivals like Rheinmetall. The move reflects broader European efforts to strengthen local defense industries in response to U.S. and Russian military postures.

If successful, the IPO would mark a significant milestone for CSG and provide a boost to its M&A strategy. The company has already demonstrated its ability to scale rapidly through acquisitions and is now seeking to leverage public market capital to continue its expansion.