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AeroVironment’s JUMP 20 uncrewed aircraft system is equipped with advanced intelligence, surveillance, and reconnaissance capabilities. | Source: AeroVironment

AeroVironment, a defense contractor based in Arlington, Virginia, has agreed to acquire BlueHalo in an all-stock transaction worth approximately $4.1 billion. BlueHalo is best known for its drone swarm and counter-drone technology. The acquisition, which has been approved by both companies’ boards of directors, is expected to close in the first half of 2025.

AeroVironment said its acquisition of BlueHalo will create a next-generation defense technology company across multiple domains, including air, land, sea, space, and cyber. It said BlueHalo’s portfolio of products and 100 patents will complement its existing expertise in the design, development, manufacturing, training, and servicing of uncrewed systems, loitering munitions, and advanced technologies.

BlueHalo was founded as a purpose-built platform to provide capabilities in several key mission areas: space technologies, counter-uncrewed aircraft systems (cUAS), directed energy, electronic and cyber warfare, artificial intelligence, and other emerging technologies including uncrewed underwater vehicles (UUVs).

BlueHalo estimates it will earn more than $900 million in revenue 2024, in addition to its funded backlog of nearly $600 million and a pipeline of multiple billion-dollar opportunities. BlueHalo generated approximately $886 million of revenue in 2023, compared to $759 million and $660 million in 2022 and 2021, respectively.

On a pro forma basis, the combined company expects to make more than $1.7 billion in revenue.

“For over 50 years, [AeroVironment] 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,” said Wahid Nawabi, chairman, president, and CEO of AeroVironment.

“BlueHalo not only brings key franchises and complementary capabilities, but also a wealth of technologies, diverse customers, and exceptional talent to [AeroVironment]. 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,” he continued.

Per the terms of the merger agreement, AeroVironment will issue approximately 18.5 million shares of common stock to BlueHalo. Following the close of the transaction, AeroVironment shareholders will own approximately 60.5% of the combined company, while BlueHalo’s will own approximately 39.5%. Arlington Capital Partners, an investment firm that is the majority owner of BlueHalo, will retain a significant ownership stake in the combined company.

Nawabi will become chairman, president, and CEO of the combined company. Jonathan Moneymaker, CEO of BlueHalo, will serve as a strategic advisor to the combined company.