THEON INTERNATIONAL PLC, a company that designs and manufactures innovative night vision, thermal imaging, and electro-optical systems for defence and security applications, and EXOSENS, a high-tech company that focuses on the production of Image Intensification Tubes for defence and security, announced the signing of a long-term commercial partnership.

This agreement will ensure the close cooperation of the two companies until 2026, with an option for renewal in 2027.

Currently, the global supply and demand of Image Intensification Tubes are in a delicate balance given the relatively limited production availability globally. This limited availability is expected to be eliminated when US end-users enter the market next year for the start of long-term replacement programs for night vision systems.

Image Intensification Tubes are a critical component of night vision instruments, constituting a significant part of their cost. According to the relevant announcement, as one of the largest buyers of tubes worldwide, THEON maintains a leading market share, especially among European tube manufacturers.

This long-term agreement, which covers the period 2025–2026 with the possibility of renewal for 2027, covers not only all of THEON’s existing orders to EXOSENS but also part of the additional estimated demand for this period. 

Unlike the ad hoc orders placed in recent years, this agreement allows the two companies to better coordinate production and delivery schedules. 

For THEON, this is essential, not only to ensure its supply but equally important to further reduce delivery times once new orders are received. After all, this is one of THEON’s most important competitive advantages in the Night Vision market.

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THEON INTERNATIONAL also announced the acquisition of 60% of Harder Digital Group (Harder Digital), proceeding to an investment of 34 million euros. 

The Harder Digital Group is a specialized manufacturer of Image Intensifier Tubes (IIT) with activity mainly in Germany. This move is the first step in THEON’s efforts to secure its supply chain, while the company is also working on long-term commercial agreements with its main suppliers.

This acquisition, which is in line with the strategic priorities that were communicated during the listing process of THEON shares on the Stock Exchange of Amsterdam, takes place in a critical period, as global geopolitical developments and emerging threats have created a delicate balance of supply and demand in the field of Night Vision. This specific acquisition is expected to bring many benefits to THEON, including the following:

• It allows THEON to vertically integrate a critical element in its production chain of Night Vision systems, strengthening operational security and flexibility.
• It gives THEON further access to specialized technologies, supporting new product development through the add-on capabilities of the company’s Research and Development department.

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It should be noted that this acquisition is not expected to affect the relationship with existing THEON suppliers, ensuring the retention of strong collaborations. THEON will also continue and expand partnerships with other European and US Image Intensifier Tube manufacturers.

The acquisition will be carried out with a capital contribution of €34 million, which implies a mid-single-digit multiple of the expected EBITDA for the year 2026. Most of the funds will be allocated for the upgrade of Harder Digital’s production facilities and the increase of the dynamic of 3rd generation tube production lines, mainly in Germany and Latvia.

The remaining funds will be used for the financial restructuring of the company.

Harder Digital, which currently operates at levels significantly below its maximum capacity, aims for sales of €17 million with an EBITDA margin of 10% for 2024. In the medium term, it is expected to triple its sales by 2028, achieving a profit margin corresponding to that of THEON, after the restoration of the full production capacity and the achievement of economies of scale. 

This also goes along with the expected increase in global demand and makes it necessary for THEON to continue its long-standing cooperation with other tube manufacturers. THEON currently supplies almost 50% of the production of Harder Digital, which is expected to continue, while the rest of production will continue to be made available to third parties.

The acquisition, which is subject to the usual approvals from the relevant regulatory authorities, is expected to be completed during the fourth quarter of 2024 and is intended to be financed entirely with available funds, which will be utilized over a period of two years.

Harder Digital was founded in 1999, based in Woltersdorf, Germany, and owns subsidiaries in Germany, Serbia, and Latvia. Harder Digital has become one of the few companies in the field of Light Enhancement, covering a range of Gen I, Gen II, and Gen III, as well as purpose-built Image Intensifier Tubes (IIT) and accessories. Harder Digital exports its products to more than 30 countries worldwide.

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