AeroVironment, the U.S.-based defense technology company, announced on Wednesday its plans to acquire BlueHalo, an Arlington Capital Partners portfolio company, in an all-stock transaction valued at approximately $4.1 billion. This strategic move is expected to create a more diversified global leader in all-domain defense technologies.
The merger, which has been unanimously approved by the governing bodies of both companies, is poised to close in the first half of 2025, pending regulatory and shareholder approvals. The transaction aims to fuse AeroVironment's established expertise in uncrewed systems and loitering munitions with BlueHalo's pioneering capabilities in emerging technologies like directed energy, counter-uncrewed aircraft systems (cUAS), and space tech.
Founded in 2019, BlueHalo has swiftly carved out a name for itself in the defense sector. The company has been at the forefront of several groundbreaking developments, including being the first to field directed energy laser weapon systems operationally. Some of its flagship products, like the LOCUST laser weapon systems and the BADGER adaptive phased array, have been recognized for their innovative approaches in defense technology.
BlueHalo reports impressive growth, estimating revenues of over $900 million for 2024, building on the $886 million revenue recorded in 2023. The expanding backlog and a pipeline poised with billion-dollar opportunities underscore the company's strong market position.
Wahid Nawabi, AeroVironment's Chairman, President, and CEO, expressed enthusiasm about the merger. "For over 50 years, AeroVironment has been at the forefront of battlefield innovation. This partnership with BlueHalo allows us to accelerate the next generation of defense technology," Nawabi said, highlighting how the merger aligns with AeroVironment's mission to support critical defense missions globally.
The strategic benefits of this acquisition are manifold. The combined entity aims to dominate integrated defense technologies, leveraging a comprehensive suite of solutions across multiple domains, including air, land, sea, space, and cyber. The anticipated synergies from the merger include not only operational cost savings but also enhanced innovation and manufacturing capabilities.
Jonathan Moneymaker, CEO of BlueHalo, emphasized the strategic alignment and shared vision of both companies. "Uniting with AeroVironment positions us to address pressing defense and national security challenges with unmatched speed and innovation," Moneymaker stated. Post-transaction, he will act as a strategic advisor to the merged company's management team.
Strategically, the merger is designed to expand AeroVironment's entry into critical defense segments and enhance its geographic footprint. The acquisition broadens the total addressable market for AeroVironment, allowing them to engage more substantially with segments such as counter-UAS, electronic warfare, and directed energy.
Upon conclusion of the deal, AeroVironment's shareholders will own approximately 60.5% of the combined company, whereas BlueHalo's equity holders will possess around 39.5%, subject to closing adjustments. Arlington Capital Partners, the major influencer behind BlueHalo, will maintain a significant stake in the newly formed entity.
Organizationally, the company's leadership is set to evolve. Wahid Nawabi will continue to helm the ship as Chairman, President, and CEO of the combined company. The Board of Directors will expand to ten members, with Arlington Capital Partners having the privilege to appoint two directors.
As defense technologies become increasingly critical on the international stage, the AeroVironment-BlueHalo merger is a significant step towards shaping the future landscape of defense solutions, promising enhanced agility, innovation, and comprehensive customer offerings worldwide.
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