Defense pushes millions into A'dam drone software company, with option for golden share

The Ministry of Defense is investing “several tens of millions” of euros in the Amsterdam-based company Intelic, which develops software for controlling drones. The investment includes an option for the Ministry to also acquire a “golden share” in the company, which would give it extraordinary voting rights, including the option to veto certain decisions. This would be Defense’s first golden share in a company, Parool reported.

Intelic develops software that can control drones of all makes and types. Soon, all Dutch military drones will run on the software. “Intelic is an enormously important company for us,” Defense State Secretary Derk Boswijk told the newspaper. “We talk about drones very often, and people think of the physical device. But the software to control those drones is at least as important, perhaps even more important.”

Boswijk said last month that the State should acquire golden shares in defense companies to gain more control over the domestic defense industry. These companies would then be better protected against takeovers from abroad, for example. And the government could also then prevent them from supplying equipment vital to national security to foreign hands. Defense is currently “exploring” with the Ministry of Finance the option of becoming such a priority shareholder in Intelic.

“We are already going beyond a normal customer-supplier relationship,” Boswijk said about the deal with Intelic. “We are entering into a kind of partnership. They will join us on exercises so that they can improve their software in the field, together with our soldiers.” According to Boswijk, the deal also gives assurance that Intelic will remain in the Netherlands.

It can also be attractive for a company to have the State as a priority shareholder. It often makes it easier to arrange financing or attract other investors, for example. But the golden share also comes with risks, Intelic CEO Maurits Korthals Altes told Parool.

“We do want our company to remain investable. If the Ministry of Defense gains a veto and can block shareholders, that could also be a deterrent,” Korthals Altes said. According to the CEO, the terms were therefore “firmly negotiated.”