Increase in capital preceding drone acquisition: shares facing pressure

Deutz, the German industrial engine manufacturer, has made a significant move by announcing the acquisition of SOBEK Group GmbH last weekend. This strategic move is expected to further grow Deutz's defense business segment.

The company's stock, with the ticker WKN: 630500, has been steadily approaching the 10-euro mark. However, due to the announced capital increase and the entry into the defense business, the stock is currently down around 3% on Tradegate.

Deutz plans to increase its share capital by 10%, achieved through the issuance of around 13.9 million new shares. The capital increase, aimed at financing the latest acquisition, may weigh on Deutz's stock in the short term.

The purchase price for Sobek is expected to be around 11 times the EBITDA. The details of the placement price and subscription rights are yet to be determined. The final gross proceeds will be determined after the completion of the process.

Sobek is a profitable company with expected revenue in the low to mid double-digit million euros and an EBITDA of around 10 to 12 million euros for the current fiscal year. This acquisition is not surprising, given the stock exchange's positive reception of Deutz's expansion into the defense business segment in recent weeks and months.

The capital increase is not unexpected either. Deutz has stated that the funds raised will cover the purchase price of Sobek. There are no subscription rights for this capital increase.

Analysts predict that Deutz's stock prices could potentially reach double-digits in the near future, given the company's strategic moves and the growth prospects in the defense sector.

However, the short-term impact on the stock price due to the announced capital increase remains to be seen. Investors are advised to closely monitor the developments regarding the placement price and final gross proceeds.