CSG in full stride: New notes offering and impressive financials highlight strong momentum
Czechoslovak Group (CSG), a prominent defense, industrial, and technology conglomerate based in Prague, Czech Republic, has announced a significant financing initiative: an offering of dual tranche senior secured notes due 2031. This strategic move, aiming to raise a minimum of $500 million and €350 million, underscores the company's robust growth trajectory and its commitment to strengthening its financial position for future endeavors.
The notes, which will be senior secured obligations of CSG and guaranteed by certain of its subsidiaries, are primarily intended to facilitate the full redemption of the Company's existing $775 million senior secured floating rate notes. Any remaining net proceeds will be allocated towards general corporate purposes and covering associated fees and expenses, providing CSG with enhanced financial flexibility. Interest on the Notes will be payable semi-annually, with the precise interest rate, offering price, and principal amount to be determined at the time of pricing, subject to prevailing market conditions.
Strategic Financial Structure
The structural ranking of these new notes is meticulously designed to optimize CSG's capital stack. They will rank pari passu (equally) with any of the Company's existing and future unsubordinated indebtedness. Furthermore, they will hold a senior position in right of payment to any expressly subordinated debt, and effectively senior to unsecured debt to the extent of the value of the collateral securing the Notes.
Conversely, the Notes will be effectively subordinated to certain existing or future indebtedness under asset-backed loan facilities ("ABL Facilities") of some of its U.S. subsidiaries, which are secured by higher-priority liens on related collateral. They will also be subordinated to any existing and future indebtedness or obligations secured by property or assets that do not secure the Notes. Additionally, the Notes will be structurally subordinated to any existing and future indebtedness or obligations of CSG's subsidiaries that do not guarantee the Notes. It is important to note that the completion of the offering remains subject to market conditions and cannot be assured.
Strong Financial Momentum Continues into Q2 2025
The announcement of the notes offering comes on the heels of a period of sustained robust financial performance for Czechoslovak Group. The Company has reported that its momentum, established during the first quarter of 2025, continued strongly into the two months ended May 31, 2025.
Based on preliminary, unaudited management accounts, CSG estimates impressive financial figures for the five months ended May 31, 2025:
- Revenue: €2,315.8 million
- Operating EBITDA: €631.8 million
- Operating EBITDA Margin: 27.3%
Furthermore, looking at a pro forma basis for the Last Twelve Months (LTM) ended May 31, 2025, which includes the impact of the Kinetic Group Acquisition, the estimated figures highlight the significant scale and profitability of the enlarged group:
- Revenue: €5,799.6 million
- Operating EBITDA: €1,563.0 million
- Operating EBITDA Margin: 27.0%
These preliminary results underscore CSG's operational efficiency and its successful integration of strategic acquisitions, positioning the company as a formidable player in its sectors.
Important Note on Financial Data: Readers should be aware that the preliminary financial results presented are derived from the Company’s internal accounting records and management accounts. They have not been prepared on the same basis as the Company’s audited Financial Statements or in accordance with IFRS. This information has not been audited, reviewed, or compiled by independent auditors. Consequently, these figures should not be unduly relied upon, as they are subject to inherent uncertainties, potential changes, and are not a comprehensive statement of the Company’s financial or operational results for the periods indicated.
About Czechoslovak Group
Founded in 1995 in the Czech Republic, Czechoslovak Group has undergone a remarkable transformation into a global industrial and technology powerhouse. Its rapid expansion has been fueled by a strategy of successful acquisitions of businesses and manufacturing facilities within its core industries, including defense, small caliber ammunition, and aerospace. Today, CSG operates an extensive network of 40 manufacturing facilities strategically located primarily across Europe and the United States.
The Company is exceptionally well-positioned within a large and continuously growing global market for defense products and small caliber ammunition. CSG prides itself on its long-term relationships with a diverse and loyal customer base, which spans from national government bodies, including ministries of defense, to leading companies in its target industries, such as wholesalers and retailers, across more than 70 countries worldwide. Throughout its dynamic growth, Czechoslovak Group has proudly maintained its identity as a family-led business, a characteristic that often signifies a stable, long-term vision and commitment to its operations and stakeholders. This new financing initiative is expected to further reinforce CSG's robust financial framework, enabling continued investment in its core capabilities, fostering technological innovation, and potentially seizing further strategic growth opportunities.
