What happened? RHM issued an ad-hoc announcing the acquisition of German Naval Vessels Lurssen (NVL), a leader in building naval vessels and coastguard vessels, for an undisclosed EV. NVL is said to have generated sales of c. EUR 1bn in FY24 with no details provided in regard to the asset''s order backlog, profitability or FCF metrics. Considering RHM''s net debt of EUR 1.7bn in combination with NWC seasonality in general and the expected pick-up in order activity in H225 and H126 vis-a-vis an increase in prepayments received, RHM should be able to fund the deal from existing cash. BNPP Exane View: Through the deal, RHM delivers on the envisaged expansion into naval equipment and to add sales of c. EUR1bn p.a. via MandA. While RHM has not disclosed any details in regard to the purchase price, earlier statements around TKMS suggest that NVL should (better) fit RHM''s growth and profitability criteria, while offering synergies with other businesses (sourcing, cross-sellilng), and we note that 10% of German commitment appropriations through 2047 relate to Naval. Profile: NVL (founded in 1870), is a privately owned shipyard group with four shipyards in northern Germany (Peene-Werft/ Wolgast, Blohm+Voss and Norderwerft/ Hamburg, Neue Jadewerft/ Wilhelmshaven) as well as international locations. It employs c. 2.1k staff globally and generated sales of c. EUR1bn in FY24. NVL has built around 1,000 ships at its shipyards and delivered them to over fifty different navies and coast guards. It is an established player in both military shipbuilding and ship maintenance and repair; acc. to the ad hoc, NVL is considered a pioneer in the research and development of autonomous maritime surface systems. Formerly known as Lurssen Defence, NVL was separated from the yacht division in 2021 and continued as an independent company within the family-run Lurssen Group. Rationale: RHM mgmt. said the following on the Q225 call: ''we are in negotiations with partners [...] we...