Flat Capital Invests SEK 458 Million in New Defense Industry Group

Investment company Flat Capital is investing approximately SEK 458 million in Defensor, a newly established Swedish industrial group aiming to become a leading player in the Nordic defense and security industry. Flat Capital will become the majority shareholder with an ownership stake of around 62.5 percent, according to a press release.

Simultaneously, Defensor is acquiring 70 percent of the shares in defense companies ArmaTech and SAFE4U. Following these transactions, Defensor is valued at approximately SEK 733 million and is expected to have a net debt of about SEK 100 million, corresponding to a total enterprise value of SEK 833 million.

"Through Defensor, we are building an industrial group where outstanding entrepreneurs together shape the next generation of the defense industry – fast, scalable, and tailored to the needs of a new era," said Flat Capital's Chairman of the Board, Sebastian Siemiatkowski.

Martin Grund will serve as Chairman of the Board at Defensor, while Max Jägerbring, currently CEO of ArmaTech, will assume the role of CEO at Defensor.

Defensor intends to continuously evaluate potential additional investments and acquisitions within the Nordic defense industry. According to Flat Capital, the company is regarded as a strong candidate for a future stock market listing.

"The companies that make up Defensor are resilient, have a history of strong growth and solid profitability, and are deeply rooted in the defense and security sector – a foundation that has taken decades to build. They have established an extremely strong platform, well-positioned for accelerated growth," said Flat Capital's outgoing CEO, Hanna Andreen, who will serve on Defensor's board.

In connection with the investment, Flat Capital's board has decided to evaluate the possibility of changing accounting principles from K3 to IFRS. This would mean the company would adopt IFRS 10, the so-called investment entity standard, where all holdings, regardless of ownership share, will be reported at fair value with changes recognized in the income statement.