AeroVironment to Purchase BlueHalo Establishing Subsequent-Technology Protection Know-how Firm – sUAS Information

AeroVironment, Inc. (NASDAQ: AVAV) (“AV” or the “Firm”) and BlueHalo LLC (“BlueHalo”) at this time introduced the execution of a definitive settlement beneath which AV will purchase BlueHalo in an all-stock transaction with an enterprise worth of roughly $4.1 billion, making a extra diversified international chief in all-domain
protection applied sciences. The mixed firm will carry collectively complementary capabilities to supply a complete portfolio of high-growth franchises, powered by cutting-edge know-how and targeted on addressing crucial priorities and wishes of our nation and allies across the globe.

BlueHalo, an Arlington Capital Companions portfolio firm, was based as a purpose-built platform offering industry-leading capabilities in a number of key mission areas: House Applied sciences, Counter-Uncrewed Plane Programs (cUAS), Directed Vitality, Digital Warfare, Cyber, Synthetic Intelligence and different Rising Applied sciences together with Uncrewed Underwater Automobiles (UUVs). Since its founding in 2019, BlueHalo’s notable accomplishments embody being the primary to efficiently operationally discipline directed vitality (DE) laser weapon methods (LWS) with its LOCUST LWS, being awarded House Power’s multi-billion greenback program to rework house operations with BADGER, its adaptive phased array product and serving as a pacesetter in Radio Frequency Counter-Unmanned Aerial Programs (RF C-UAS), delivering its a thousandth system final yr with its Titan and Titan-SV methods. BlueHalo has targeted on cutting-edge analysis and improvement permitting for the event of services to rework the way forward for international protection.

BlueHalo estimates that it’ll obtain greater than $900 million in revenues for 2024, along with funded backlog of practically $600 million and a pipeline of a number of billion-dollar alternatives and packages of document. BlueHalo generated roughly $886 million of income in 2023, in comparison with $759 million and $660 million in 2022 and 2021, respectively.1

The acquisition of BlueHalo will create a diversified Protection Tech firm with a extremely complementary and differentiated portfolio of options in Uncrewed Programs, brief and lengthy vary Loitering Munitions, Counter UAS, House Applied sciences, Digital Warfare and Cyber, powered by AI and Autonomy. This mixture will drive innovation, develop manufacturing capability and allow us to raised help our clients and their important missions. AV expects that BlueHalo’s portfolio of 10 flagship answer households and greater than 100 patents will seamlessly combine with AV’s complementary present experience within the design, improvement, manufacturing, coaching and servicing of Uncrewed Programs, Loitering Munitions and Superior Applied sciences. AV and BlueHalo consider that these synergies will primarily be recognized as administrative and operational price financial savings and sharing greatest practices from every firm. The businesses’ shared tradition of agile innovation and mission experience will allow the mixed entity to develop and ship next-generation applied sciences that may have vital army worth and redefine the subsequent period of Protection Know-how. On a professional forma foundation, the mixed firm is anticipated to ship greater than $1.7 billion in income.

“For over 50 years, AV has pioneered progressive options on the battlefield, and at this time we’re poised to usher within the subsequent period of protection know-how via our mixture with BlueHalo,” mentioned Wahid Nawabi, AV chairman, president and chief govt officer.

1 All income figures for BlueHalo are offered as if all acquisitions made by BlueHalo and corporations acquired by BlueHalo had been owned by BlueHalo for the whole lot of the relevant calendar yr, irrespective of the particular date of acquisition. Quantities will differ from income figures reported for BlueHalo beneath GAAP, which is able to solely embody income from and after the relevant date of acquisition. Quantities may also differ from any presentation made beneath Article 11 of Regulation S-X, which might not require inclusion of sure insignificant or immaterial acquisitions.

“BlueHalo not solely brings key franchises and complementary capabilities, but additionally a wealth of applied sciences, various clients and distinctive expertise to AV. Collectively, we’ll drive agile innovation and ship complete, next-generation options designed to redefine the way forward for protection. We’re thrilled to welcome the proficient BlueHalo group as we unite our strengths, develop our international affect and speed up progress and worth creation for AV shareholders.”
Jonathan Moneymaker, chief govt officer of BlueHalo, mentioned, “BlueHalo was based to deal with essentially the most urgent challenges confronting the protection and nationwide safety group, from unconventional threats to near-peer adversaries. We have now pioneered options for drone warfare, distributed autonomy, and the necessity for extra strong and warranted entry to house in an more and more contested, crowded and aggressive area. By these efforts, now we have earned our popularity as a trusted accomplice in protection innovation. By uniting with AV, we’re constructing a corporation geared up to satisfy rising protection priorities and ship purpose-driven, state-of-the-art options with unmatched velocity. Collectively, we stay dedicated to defending those that defend us whereas driving the subsequent era of transformational developments in protection know-how.”

Strategic and Monetary Advantages:

·  Creates a diversified {industry} chief. This transaction brings collectively AV’s established portfolio of cutting-edge protection options with BlueHalo’s rising and industry-defining applied sciences. This union will present clients with a complete suite of options throughout a number of domains—together with air, land, sea, house and cyber. Collectively, AV and BlueHalo will create a pacesetter in built-in protection applied sciences with a worldwide footprint able to addressing the complete spectrum of recent protection.

·  Will increase agility and velocity, with enhanced infrastructure, manufacturing capabilities and geographic footprint. The mixed firm will profit from higher sources, enabling sooner innovation and extra environment friendly deployment of important protection methods.

· Helps AV’s entry into further key protection segments and builds on the Firm’s robust observe document of offering important options. With BlueHalo’s portfolio, AV will enter into new segments that may considerably improve the Firm’s whole addressable market, together with Counter-UAS, Directed Vitality, Digital Warfare, Cyber and House applied sciences. The acquisition will carry with it BlueHalo’s key packages of document, deep buyer relationships and robust backlog and pipeline, positioning the longer term firm as a extra strong and sustainable prime protection answer supplier. This partnership will improve AV’s skill to satisfy the evolving wants of the Division of Protection (DoD) and allied nations with a strong suite of progressive options.

· Diversifies combine of consumers, merchandise and income. The mixed firm is anticipated to realize a extra balanced and diversified buyer base, product and income combine, benefiting from BlueHalo’s established presence in key rising protection markets. The mixed firm will profit from expanded geographical attain, with the flexibility to offer BlueHalo’s options to AV’s bigger worldwide buyer base. By integrating complementary capabilities, AV will likely be well-positioned to generate sustained long-term worth for shareholders.

· Generates enticing returns. AV expects the transaction to be accretive to income, adjusted EBITDA and non-GAAP EPS within the first full fiscal yr post-close.

Transaction Particulars

The transaction, which has been unanimously authorized by each firms’ board of administrators or managers, is anticipated to shut within the first half of calendar 2025, topic to regulatory and AV shareholder approvals, in addition to different customary closing circumstances.

Per the phrases of the merger settlement, AV will concern roughly 18.5 million shares of AV widespread inventory to BlueHalo.

Following the shut of the transaction and primarily based on AV’s shares excellent as of November 18, 2024, AV’s shareholders will personal roughly 60.5% of the mixed firm and BlueHalo’s fairness holders will personal roughly 39.5%, topic to closing changes. Arlington Capital Companions, an funding agency that’s the majority proprietor of BlueHalo, will retain a big possession stake within the mixed firm.

We count on considerably all the BlueHalo holders to enter lock-up agreements with respect to their transaction consideration, with 40% releasing 12 months put up shut and the remaining 60% to be launched in equal tranches 18 and 24 months after the shut.

Management, Governance and Headquarters

Following the completion of the transaction, AV Chairman, President and CEO Wahid Nawabi will likely be Chairman, President and CEO of the mixed firm. Jonathan Moneymaker, CEO of BlueHalo, will function a strategic advisor to Mr. Nawabi and the mixed firm Administration Crew.

Upon closing, the AV Board of Administrators will likely be expanded to comprise 10 members. Arlington Capital Companions could have the correct to nominate two administrators to the Board, topic to minimal possession thresholds.

The mixed firm will likely be at headquartered in Arlington, Virginia, at AV’s company headquarters.  

Convention Name and Webcast

AV will host a convention name to debate the transaction. Particulars are under.

Date: November 19, 2024

Time: 8:00 a.m. ET | 5:00 a.m. PT | 6:00 a.m. MT | 7:00 a.m. CT

Participant registration URL: https://register.vevent.com/register/BIe5d12b8272ca4a85b299c6205a7efea8

The stay audio webcast may also be accessible by way of the Investor Relations part of AV’s web site, http://investor.avinc.com. Please entry the positioning quarter-hour earlier than the occasion to make sure any essential software program is downloaded.

Advisors

RBC Capital Markets is serving as monetary advisor and Latham & Watkins LLP is serving as authorized advisor to AV. Joele Frank, Wilkinson Brimmer Katcher is serving as strategic communications advisor to AV. J.P. Morgan Securities LLC is serving as monetary advisor and Goodwin Procter LLP is serving as authorized advisor to Arlington Capital Companions and BlueHalo.

About AeroVironment, Inc.

AeroVironment (NASDAQ: AVAV) gives know-how options on the intersection of robotics, sensors, software program analytics and connectivity that ship extra actionable intelligence so you possibly can Proceed with Certainty. Headquartered in Virginia, AeroVironment is a worldwide chief in clever, multi-domain robotic methods, and serves protection, authorities and business clients. For extra data, go to www.avinc.com.

About BlueHalo

BlueHalo is purpose-built to offer industry-leading capabilities within the areas of House, C-UAS and Autonomous Programs, Digital Warfare & Cyber, and AI/ML. The corporate develops and brings to market next-generation capabilities to help clients’ important missions and nationwide safety. Study extra at http://www.bluehalo.com.

About Arlington Capital Companions

Arlington Capital Companions is a Washington, D.C.-area personal funding agency specializing in government-regulated industries. The agency companions with founders and administration groups to construct strategically vital companies within the authorities providers and know-how, aerospace and protection, and healthcare sectors. Since its inception in 1999, Arlington has invested in over 175 firms and is at present investing out of its $3.8 billion Fund VI. For extra data, go to Arlington’s web site at www.arlingtoncap.com and comply with Arlington on LinkedIn.

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