Hexest Materials AS, a 100% state-owned entity under Estonia's Ministry of Defence, has officially launched a strategic investor search for the construction and operation of the Baltic region’s first RDX military explosives production facility, in a process led by KPMG Baltics. The decision to proceed with the strategic investor search was made public on the 10th of April, with a press release issued by the Ministry of Defence: Riik korraldab lõhkeainetootja Hexest Materialsi strateegilise investori leidmiseks valikpakkumise | Kaitseministeerium.
"In recent months, Hexest Materials has been focused on negotiations with the core technology partner, while simultaneously refining the business plan and expanding our core team. We have done preparatory work to attract a strategic investor. We are progressing at a good pace to reach our objective of commencing production of explosive materials in 2028," said Hexest Materials management board member Randel Veerits.
The Government of Estonia is offering a 49% stake in Hexest Materials, while retaining majority ownership post-transaction. The GoE has already deployed substantial development capital into the project, and a preferred technology partner has also been selected for the facility.
The project comes against a backdrop of growing pressure across Europe to establish domestic energetics production capacity. EU member states have faced persistent shortfalls in military-grade explosives and munitions output since 2022, prompting a broader push to reduce dependence on 3rd party supply chains for critical defense inputs. Estonia has yet to anchor a large-scale domestic defense manufacturing base, despite significant national and allied defense spending commitments, leaving a clear gap that Hexest Materials is positioned to address.
„It is a privilege to advise on a transaction that sits at the intersection of national security and industrial development. We are pleased to support the Hexest Materials team and the Government of Estonia as they take this important step forward,“ said Head of M&A at KPMG Baltics Dmitri Ševoldajev.
