If Iran blocks the oil arteries, who makes the most money? A family of French "mine-sweeping drones" joins the ranks of billionaires.

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French defense technology giant Exail Technologies is rapidly becoming one of the most prominent beneficiaries of the global wave of military buildup.

In the face of a US-Israeli joint invasion, Iran threatened to lay mines in the Strait of Hormuz, pushing the French company focused on underwater drones into the procurement spotlight for navies worldwide. Since mid-2024, its share price has surged more than 700%.

The worsening situation has directly fueled a scramble for Exail, with the company’s stock hitting an all-time high last week.

Exail CEO Raphaël Gorgé said the company is continuously receiving capability assessments and procurement inquiries from many parties, “If I had 12 systems available for immediate delivery right now, it wouldn’t be hard to find buyers.”

With the market value of the Gorgé family’s roughly 41% stake in Exail soaring, the family’s net worth has reached about $1 billion, joining the Bloomberg Billionaires Index. This week, the family's holding company took the opportunity to cash out, selling shares worth 75.6 million euros.

Hormuz Crisis Ignites Procurement Demand

Exail’s core product is a top-tier mine-hunting drone system, with each set costing about 500 million euros (approximately $580 million) and a delivery cycle of up to 18 months. The system consists of a fleet of underwater drones deployed by an unmanned surface vessel, which autonomously detects and destroys sea mines after entering mined areas. In 2019, the Belgian and Dutch navies were the first to purchase this system, with a joint order for more than 1,000 drones.

Exail had already been amassing orders before Iran’s threat to mine the Strait.

According to Gorgé, the UAE—recently under sustained pressure from Iranian threats—placed an order with Exail more than a year ago. The real surge in the company’s stock price began early last year with a 400-million-euro mine-hunting drone order from an unnamed navy.

Exail’s competitors in the underwater drone sector include larger groups such as France’s Thales SA, Sweden’s Saab AB, and Norway’s Kongsberg Gruppen ASA.

Europe’s Defense Restructuring Wave Creates Winners Among Small and Midsize Firms

Exail’s rise reflects fundamental changes in Europe’s defense industry. After Russia’s 2022 invasion of Ukraine, European countries have greatly increased defense spending, with mine-clearing in the Black Sea becoming a prominent need; meanwhile, persistent doubts over the sustainability of US security commitments are also prompting Europe to boost autonomous defense investment.

Jean-Francois Delcaire, fund manager at Paris-based HMG Finance, said, “The global restructuring and rearmament is a big trend, already reflected in soaring share prices and solid outlooks. However, there are risks in fulfilling defense contracts, and delivery takes time.”

So far this year, three defense contractors in Europe have gone public, and French-German joint tank maker KNDS NV is preparing a large-scale IPO. Exail’s market capitalization had long been below 500 million euros but surpassed 2.5 billion euros this month.

Acquisitions and Integration Lay a Technological Foundation

Exail’s technological strength didn’t appear overnight. Raphaël Gorgé joined the family business in 2004 and led the company’s most important strategic acquisition to date—in 2022, acquiring civilian marine drone maker iXblue for 410 million euros and merging it with the group’s own military marine robotics business. Part of the acquisition funds came from UK private equity firm ICG Plc.

This bet has paid off. After the merger, Exail’s group profits nearly doubled, with demand for sonar and anti-jamming navigation systems also boosting performance, and the backlog of orders jumped significantly.

The family’s business interests continue to grow. Jean-Pierre Gorgé, the company’s founder and Raphaël's father, established the firm in 1988, and just this month another company under the family completed about 100 million euros in financing for R&D and design of small modular nuclear reactors.

Execution Risks Behind High Valuation

Although the share price has fallen back to around 129 euros this week, Exail currently trades at around 71 times expected earnings, more than twice the average valuation level of the past decade.

François Dossou, head of equities at Sienna Gestion, pointed out that the company still needs to fulfill its existing order backlog, “They have technical strength, but for companies of this size, execution risk can’t be ignored.”

Gorgé remains optimistic about the outlook. He expects the order book “to fill faster and stronger in the coming months and next five to ten years,” and believes the nature of modern warfare is changing—customers are gradually realizing that four frigates paired with 200 drones are more cost-effective than six frigates, and drones can be delivered in 18 months, instead of the five to six years required for traditional equipment.

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