Indra will take a controlling position of Tess Defense, the consortium of which the company is a part along with Escribano, Sapa Placencia and Santa Bárbara Sistemas, for almost 107 million eurosas reported by the company in a statement sent to the National Securities Market Commission (CNMV).
Concern in Defense
This consortium is responsible for the production of 348 8×8 Dragon wheeled combat vehicles (VCR) for the Army within the framework of a contract valued at approximately 2,000 million euros and which has generated manifest concern from the Ministry of Defense due to the various delays that the project has suffered.
«Indra has reached an agreement with the rest of the shareholders of Tess Defense (…) to increase its participation in Tess from the current 24.67% to 51.01%, with the rest of the share capital distributed as follows form: Santa Bárbara Sistemas (16.33%); Notary Mechanical & Engineering (16.33%) and SAPA Operations (16.33%). The amount agreed for the acquisition of 26.34% of Tess’ share capital is 106.7 million euros,” he detailed.
The agreement also contemplates an additional ‘earn-out’ of up to a maximum of 30 million euros, subject to Tess generating sales and a gross operating result (Ebitda) higher than those of the business plan estimated at the time of the acquisition.
«The contractual agreements signed between the partners configure Tess as an entity with balance, capacity and responsibility for program management, which will have a new governance model and a board made up of seven members, of which four will be proposed by Indra and one for each of the other shareholders,” the statement added.
The operation, whose execution is subject to compliance with certain regulatory suspensive conditions, will allow Indra to consolidate Tess through the “global integration” method.
«During the period 2025-2026, Tess will in turn record in its financial statements only the income from the production of section one of the VCR 8×8 vehicle, for the rest of the sections of the VCR 8×8 program, as well as for the VAC Program and the For the rest of future programs, TESS’s own management margin as main contractor will be considered,” he adds.
Expedite deliveries to Defense
The main objective of this movement is to speed up the delivery of the units committed to the Ministry of Defense through Indra’s control position, which is expected to improve the coordination of the project, which is accumulating multiple delays.
In fact, at the beginning of this year the Minister of Defense, Margarita Robles, warned the companies that configure Tess Defense that possible non-compliance of the contract would entail “consequences.”
In 2020, the Ministry of Defense signed the manufacturing supply contract for the 8×8 Dragon vehicles with the consortium, although the purchase of these vehicles has been underway since 2007, but it was delayed for various reasons and the contract signed in 2020 already contemplated that would be delivered progressively, until 2030.
Along these lines, last March the CEO of Indra, José Vicente de los Mozos, assured that delivering the armored vehicles is a “priority” for his company.
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