Aerovironment Acquires Arcturus For $405 Million And Bigger Drones
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By Annlee Ellingson AeroVironment Inc. has increased the size of unmanned aircraft systems ( UAV s ) i n i t s arsenal with the acquisition of Arcturus UAV Inc. The total purchase price was $405 million, including $355 million in cash and $50 million in AeroVironment stock. The move expands Simi Valley-based AeroVironment’s business into adjacent segments and broadens its capabilities and customer footprint.
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Specifically, the privately held Arcturus UAV, founded in 2004 and based on Petaluma, California, designs and manufactures Group 2 and Group 3 unmanned aerial systems (UAS) and provides related services, including contractor-owned, contractor-operated services. The company is the leading supplier to the United States Special Operations Command, supporting its $1.4 billion Mid-Endurance Unmanned Aircraft Systems III and IV programs, and has been selected for funded development and demonstrations supporting the U.S. Army’s Future Tactical Unmanned Aircraft System program. Arcturus UAV’s topline growth exceeded 20% for each of its last two fiscal years. “Group 2 and 3 UAS and services, collectively, potentially represent more than one billion dollars in annual contract value, according to an independent forecast,” said AeroVironment President and CEO Wahid Nawabi in a statement.The acquisition gives AeroVironment “a complete set of Group 1 through 3 UAS, tactical missile systems, high-altitude pseudo-satellites and unmanned ground vehicle solutions,” he added. “With the support of AeroVironment, we will have greater scale, expanded resources, cutting-edge technology and superior capabilities to meet the growing global demand for our products and solutions,” added Arcturus UAV President and CEO D’Milo Hallerberg. Arcturus UAV brings with it about 270 employees, and after the acquisition, key members of its executive management team will remain in leadership positions, the companies said. The transaction is expected to close during fourth quarter of AeroVironment’s fiscal year 2021, subject to customary closing conditions and regulatory approvals, at which point Arcturus UAV will operate as a wholly owned subsidiary of AeroVironment. Jefferies LLC served as exclusive financial advisor, and K&L Gates served as legal advisor to AeroVironment on the deal. Evercore served as exclusive financial advisor, and Hogan Lovells served as legal advisor to Arcturus UAV.
