Shares of SMAG Mobile Antenna Masts AG, a German defense contractor specializing in mobile antenna masts, declined as much as 14.3% from their IPO price of $46 on their Frankfurt Stock Exchange debut. The stock, trading under the ticker '1SMA' on the Scale segment, quickly dropped to $39.42. This performance suggests a shift in investor appetite for defense stocks, which had previously seen a boost due to geopolitical tensions.
Despite the lackluster debut, SMAG has reported strong financial health and growth prospects. The company, founded in 1974 and employing 170 people, has an order backlog of $1.4 billion and expects to reach revenues of $55 million to $60 million this year, up from $34 million last year. Its adjusted operating profit margin (EBIT margin) is projected to be between 19% and 21% in 2026. Prior to its debut, the company secured $129.6 million from its IPO, with $29.6 million allocated to the company for production capacity and sales expansion, and the majority going to its Munich-based financial investor, Aequita SE & Co., which reduced its stake to 50.1%.
The IPO, priced at the lower end of the offering range of up to $54, valued the company at approximately $260 million. SMAG aims to use the proceeds to expand production and sales, capitalizing on its position as a key supplier for military and defense applications, with its systems used in over 20 countries and by 15 NATO militaries. The company's debut follows other German defense firms like Gabler and Vincorion that went public earlier in the year, though German-French tank manufacturer KNDS postponed its IPO due to valuation concerns.
