Theon International expects a temporary increase in leverage as it completes two recently announced acquisitions, but management says the balance sheet will strengthen over the coming years as higher earnings and robust cash generation reduce debt.
The company's net debt-to-EBITDA ratio, currently at 1.7x, is expected to rise to around 3.0x on a pro forma basis following the acquisitions of France's MERIO and HGH. The transactions will be financed primarily through new borrowing, with no equity issuance planned for the HGH deal. While the acquisitions will temporarily increase leverage, management expects the ratio to decline to roughly 2.5x by 2027 as the acquired businesses contribute to earnings growth and stronger operating cash flow, enabling the company to deleverage at a rapid pace.
The defense technology group also reported a strong set of first-half 2026 results, underscoring continued demand across its core markets. Revenue rose 35.4% year over year to €248.7 million, while adjusted EBIT increased 37.5% to €65.1 million, with the operating margin remaining at a robust 26.2%.
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New orders climbed 38.5% to €232.5 million, keeping the book-to-bill ratio close to one. Management said this reflects sustained customer demand for the company's products and supports confidence in the order pipeline.
Theon entered the second half of the year with a soft backlog of €1.46 billion and an additional €902 million in options, providing significant revenue visibility. Against that backdrop, the company reaffirmed its 2026 guidance for revenue of €570 million to €600 million and maintained its longer-term target of reaching €1 billion in annual sales by 2029.
