AeroVironment and BlueHalo announced the execution of a definitive agreement under which AV will acquire BlueHalo in an all-stock deal with an enterprise value of approximately $4.1 billion, creating a more diversified global leader in all-domain defense technologies. This company will combine complementary capabilities to offer a comprehensive portfolio of high-growth franchises powered by sophisticated technology and focused on addressing the nation’s and allies’ most critical priorities and needs worldwide.
BlueHalo, an Arlington Capital Partners portfolio company, was founded as a purpose-built platform providing industry-leading capabilities in several key mission areas, such as space Technologies, Counter-Uncrewed Aircraft Systems (cUAS), Directed Energy, Electronic Warfare, Cyber, Artificial Intelligence, and other Emerging Technologies, including Uncrewed Underwater Vehicles (UUVs).
Since being founded in 2019, BlueHalo’s notable accomplishments include being the first to successfully operationally field directed energy (DE) laser weapon systems (LWS) with its LOCUST LWS, being awarded Space Force’s multi-billion dollar program to transform space operations with BADGER, its adaptive phased array product and serving as a leader in Radio Frequency Counter-Unmanned Aerial Systems (RF C-UAS), delivering its 1000th system last year with its Titan and Titan-SV systems. BlueHalo has focused on sophisticated research and development, allowing products and services to transform the future of global defense.
BlueHalo estimates that it will achieve over $900 million in revenues for this year, in addition to a funded backlog of nearly $600 million and a pipeline of multiple billion-dollar opportunities and programs of record. BlueHalo generated approximately $886 million of revenue in 2023, compared to $759 million and $660 million in 2022 and 2021, respectively.
This acquisition of BlueHalo will create a diversified Defense Tech company with a highly complementary and differentiated portfolio of solutions in Uncrewed Systems, short and long-range Loitering Munitions, Counter UAS, Space Technologies, Electronic Warfare, and Cyber, powered by AI and Autonomy. This combination will be driving innovation, expand manufacturing capacity and enable them to support customers and their critical missions better.
AV expects that BlueHalo’s portfolio of 10 flagship solution families and over 100 patents will seamlessly integrate with AV’s complementary existing expertise in the design, development, manufacturing, training and servicing of Uncrewed Systems, Loitering Munitions and Advanced Technologies. And AV and BlueHalo believe that these synergies will primarily be identified as administrative and operational cost savings and sharing best practices from each company. These companies’ shared culture of agile innovation and mission expertise will enable the combined entity to develop and deliver next-generation technologies that will have significant military value and redefine the next era of Defense Technology. On a pro forma basis, the combined company is expected to deliver more than $1.7 billion in revenue.
The deal, which has been unanimously approved by both companies’ board of directors or managers, is expected to close in the first half of calendar 2025, subject to regulatory and AV shareholder approvals, as well as other customary closing conditions.
Per the terms of the merger agreement, AV will issue about 18.5 million shares of AV common stock to BlueHalo.
Following the closing of the deal and based on AV’s shares outstanding as of November 18, 2024, AV’s shareholders will own approximately 60.5% of the combined company and BlueHalo’s equity holders will own approximately 39.5%, subject to closing adjustments. Arlington Capital Partners, an investment firm that is the majority owner of BlueHalo, will retain a significant ownership stake in the combined company.
Following the completion of the transaction, AV Chairman, President and CEO Wahid Nawabi will be Chairman, President and CEO of the combined company. And Jonathan Moneymaker, CEO of BlueHalo, will serve as a strategic advisor to Nawabi and the combined company Management Team.
Upon the closing of the deal, the AV Board of Directors will be expanded to comprise 10 members. Arlington Capital Partners will have the right to appoint two directors to the Board, subject to minimum ownership thresholds.
RBC Capital Markets is serving as financial advisor and Latham & Watkins is working as legal advisor to AV. And Joele Frank, Wilkinson Brimmer Katcher is working as strategic communications advisor to AV. J.P. Morgan Securities is working as financial advisor and Goodwin Procter is working as legal advisor to Arlington Capital Partners and BlueHalo.
The combined company will be based in Arlington, Virginia, at AV’s corporate headquarters.
KEY QUOTES:
“For over 50 years, AV has pioneered innovative solutions on the battlefield, and today we are poised to usher in the next era of defense technology through our combination with BlueHalo. BlueHalo not only brings key franchises and complementary capabilities, but also a wealth of technologies, diverse customers and exceptional talent to AV. Together, we will drive agile innovation and deliver comprehensive, next-generation solutions designed to redefine the future of defense. We are thrilled to welcome the talented BlueHalo team as we unite our strengths, expand our global impact and accelerate growth and value creation for AV shareholders.”
- Wahid Nawabi, AV chairman, president and chief executive officer
“BlueHalo was founded to address the most pressing challenges confronting the defense and national security community, from unconventional threats to near-peer adversaries. We have pioneered solutions for drone warfare, distributed autonomy, and the need for more robust and assured access to space in an increasingly contested, crowded and competitive domain. Through these efforts, we have earned our reputation as a trusted partner in defense innovation. By uniting with AV, we are building an organization equipped to meet emerging defense priorities and deliver purpose-driven, state-of-the-art solutions with unmatched speed. Together, we remain committed to protecting those who defend us while driving the next generation of transformational advancements in defense technology.”
- Jonathan Moneymaker, chief executive officer of BlueHalo
