Enables AeroVironment’s Entry into Key Segments
and Strengthens Multi-Domain Capabilities
All-Stock Transaction Will Significantly
Enhance Growth and Diversification
Companies to Host Conference Call Today at 8:00
A.M. ET
AeroVironment, Inc. (NASDAQ: AVAV) (“AV” or the “Company”) and
BlueHalo LLC (“BlueHalo”) today announced the execution of a
definitive agreement under which AV will acquire BlueHalo in an
all-stock transaction with an enterprise value of approximately
$4.1 billion, creating a more diversified global leader in
all-domain defense technologies. The combined company will bring
together complementary capabilities to offer a comprehensive
portfolio of high-growth franchises, powered by cutting-edge
technology and focused on addressing the most important priorities
and needs of our nation and allies around the globe.
BlueHalo, an Arlington Capital Partners portfolio company, was
founded as a purpose-built platform providing industry-leading
capabilities in several key mission areas: Space Technologies,
Counter-Uncrewed Aircraft Systems (cUAS), Directed Energy,
Electronic Warfare, Cyber, Artificial Intelligence and other
Emerging Technologies including Uncrewed Underwater Vehicles
(UUVs). Since its founding 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 cutting-edge research and development
allowing for the development of products and services to transform
the future of global defense.
BlueHalo estimates that it will achieve more than $900 million
in revenues for 2024, in addition to 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.1
The 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 drive innovation, expand manufacturing capacity and enable us
to better support our customers and their critical missions. AV
expects that BlueHalo’s portfolio of 10 flagship solution families
and more than 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. AV and BlueHalo
believe that these synergies will primarily be identified as
administrative and operational cost savings and sharing best
practices from each company. The 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.
“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,” said
Wahid Nawabi, AV chairman, president and chief executive officer.
“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.”
Jonathan Moneymaker, chief executive officer of BlueHalo, said,
“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.”
Strategic and Financial Benefits:
- Creates a diversified industry leader. This transaction
brings together AV’s established portfolio of cutting-edge defense
solutions with BlueHalo’s emerging and industry-defining
technologies. This union will provide customers with a
comprehensive suite of solutions across multiple domains—including
air, land, sea, space and cyber. Together, AV and BlueHalo will
create a leader in integrated defense technologies with a global
footprint capable of addressing the full spectrum of modern
defense.
- Increases agility and speed, with enhanced infrastructure,
manufacturing capabilities and geographic footprint. The
combined company will benefit from greater resources, enabling
faster innovation and more efficient deployment of critical defense
systems.
- Supports AV’s entry into additional key defense segments and
builds on the Company’s strong track record of providing essential
solutions. With BlueHalo’s portfolio, AV will enter into new
segments that will significantly increase the Company’s total
addressable market, including Counter-UAS, Directed Energy,
Electronic Warfare, Cyber and Space technologies. The acquisition
will bring with it BlueHalo’s key programs of record, deep customer
relationships and strong backlog and pipeline, positioning the
future company as a more robust and sustainable prime defense
solution provider. This partnership will enhance AV’s ability to
meet the evolving needs of the Department of Defense (DoD) and
allied nations with a robust suite of innovative solutions.
- Diversifies mix of customers, products and revenue. The
combined company is expected to achieve a more balanced and
diversified customer base, product and revenue mix, benefiting from
BlueHalo’s established presence in key emerging defense markets.
The combined company will benefit from expanded geographical reach,
with the ability to provide BlueHalo’s solutions to AV’s larger
international customer base. By integrating complementary
capabilities, AV will be well-positioned to generate sustained
long-term value for shareholders.
- Generates attractive returns. AV expects the transaction
to be accretive to revenue, adjusted EBITDA and non-GAAP EPS in the
first full fiscal year post-close.
Transaction Details
The transaction, 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
approximately 18.5 million shares of AV common stock to
BlueHalo.
Following the close of the transaction 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.
We expect substantially all of the BlueHalo holders to enter
lock-up agreements with respect to their transaction consideration,
with 40% releasing 12 months post close and the remaining 60% to be
released in equal tranches 18 and 24 months after the close.
Leadership, Governance and Headquarters
Following the completion of the transaction, AV Chairman,
President and CEO Wahid Nawabi will be Chairman, President and CEO
of the combined company. Jonathan Moneymaker, CEO of BlueHalo, will
serve as a strategic advisor to Mr. Nawabi and the combined company
Management Team.
Upon closing, 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.
The combined company will be at headquartered in Arlington,
Virginia, at AV’s corporate headquarters.
Conference Call and Webcast
AV will host a conference call to discuss the transaction.
Details are below.
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 live audio webcast will also be accessible via the Investor
Relations section of AV’s website, http://investor.avinc.com.
Please access the site 15 minutes before the event to ensure any
necessary software is downloaded.
Advisors
RBC Capital Markets is serving as financial advisor and Latham
& Watkins LLP is serving as legal advisor to AV. Joele Frank,
Wilkinson Brimmer Katcher is serving as strategic communications
advisor to AV. J.P. Morgan Securities LLC is serving as financial
advisor and Goodwin Procter LLP is serving as legal advisor to
Arlington Capital Partners and BlueHalo.
About AeroVironment, Inc.
AeroVironment (NASDAQ: AVAV) provides technology solutions at
the intersection of robotics, sensors, software analytics and
connectivity that deliver more actionable intelligence so you can
Proceed with Certainty. Headquartered in Virginia, AeroVironment is
a global leader in intelligent, multi-domain robotic systems, and
serves defense, government and commercial customers. For more
information, visit www.avinc.com.
About BlueHalo
BlueHalo is purpose-built to provide industry-leading
capabilities in the areas of Space, C-UAS and Autonomous Systems,
Electronic Warfare & Cyber, and AI/ML. The company develops and
brings to market next-generation capabilities to support customers’
critical missions and national security. Learn more at
http://www.bluehalo.com.
About Arlington Capital Partners
Arlington Capital Partners is a Washington, D.C.-area private
investment firm specializing in government-regulated industries.
The firm partners with founders and management teams to build
strategically important businesses in the government services and
technology, aerospace and defense, and healthcare sectors. Since
its inception in 1999, Arlington has invested in over 175 companies
and is currently investing out of its $3.8 billion Fund VI. For
more information, visit Arlington’s website at www.arlingtoncap.com
and follow Arlington on LinkedIn.
Statement Regarding Forward-Looking Information
This press release contains statements regarding the Company,
BlueHalo, the proposed transactions and other matters that are
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended (the “Securities Act”), and
Section 21E of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). In some cases, forward-looking statements can be
identified by words such as “anticipate,” “approximate,” “believe,”
“plan,” “estimate,” “expect,” “project,” “could,” “should,”
“strategy,” “will,” “intend,” “may” and other similar expressions
or the negative of such words or expressions. Statements in this
press release concerning (i) the Company’s or BlueHalo’s expected
future financial position, results of operations, revenues,
business strategy, production capacity, competitive positions,
growth opportunities, employment opportunities and mobility, plans
and objectives of management and (ii) the Company’s proposed
acquisition of BlueHalo, the expected benefits of the acquisition,
including with respect to the business outlook or future economic
performance, anticipated profitability, revenues, expenses or other
financial items, and product or services line growth, the structure
of the proposed acquisition, the closing date of the proposed
acquisition, and plans following the closing of the proposed
acquisition, together with other statements that are not historical
facts, are forward-looking statements that are estimates reflecting
management’s best judgment based upon currently available
information. Such forward-looking statements are inherently
uncertain, and stockholders and other potential investors must
recognize that actual results may differ materially from
expectations as a result of a variety of factors, including,
without limitation, those discussed below. Such forward-looking
statements are based upon management’s current expectations and
include known and unknown risks, uncertainties and other factors,
many of which the Company and BlueHalo are unable to predict or
control, that may cause actual results, performance or plans to
differ materially from any future results, performance or plans
expressed or implied by such forward-looking statements. These
statements involve risks and uncertainties that could cause actual
results to differ materially from those anticipated in these
statements as a result of a number of factors, including, but not
limited to:
- the risk that the transaction described herein will not be
completed or will not provide the expected benefits, or that we
will not be able to achieve the cost or revenue synergies
anticipated;
- the failure to timely or at all obtain Company stockholder
approval for the acquisition;
- the inability to obtain required regulatory approvals for the
acquisition;
- the timing of obtaining such approvals and the risk that such
approvals may result in the imposition of conditions that could
adversely affect the combined company or the expected benefits of
the acquisition;
- the risk that a condition to closing of the acquisition may not
be satisfied on a timely basis or at all;
- the possible occurrence of an event, change or other
circumstance that would give rise to the termination of the
transaction agreement;
- the risk of shareholder litigation in connection with the
proposed transaction, including resulting expense or delay in delay
in closing of the transaction;
- the failure of the proposed transaction to close for any other
reason;
- the diversion of the attention of the Company and BlueHalo
management from ongoing business operations;
- unexpected costs, liabilities, charges or expenses resulting
from the acquisition;
- the risk that the integration of the Company and BlueHalo will
be more difficult, time-consuming or expensive than
anticipated;
- the risk of customer loss or other business disruption in
connection with the transaction, or of the loss of key
employees;
- the fact that unforeseen liabilities of the Company or BlueHalo
may exist;
- the risk of doing business internationally;
- the challenging macroeconomic environment, including
disruptions in the defense industry;
- risks that the Company may not be able to manage strains
associated with its growth;
- dependence on key personnel;
- stock price volatility;
- the effect of legislative initiatives or proposals, statutory
changes, governmental or other applicable regulations and/or
changes in industry requirements;
- the Company’s and BlueHalo’s ability to protect their
intellectual property and litigation risks; and
- other risks and uncertainties identified in the “Risk Factors,”
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” and “Business” sections of the Company’s
most recent Annual Report on Form 10-K and its subsequent Quarterly
Reports on Form 10-Q, and other risks as identified from time to
time in its Securities and Exchange Commission (“SEC”)
reports.
Other unknown or unpredictable factors also could have a
material adverse effect on the Company’s business, financial
condition, results of operations and prospects. Accordingly,
readers should not place undue reliance on these forward-looking
statements. These forward-looking statements are inherently subject
to uncertainties, risks and changes in circumstances that are
difficult to predict. Except as required by applicable law or
regulation, neither the Company nor BlueHalo undertakes (and each
of the Company and BlueHalo expressly disclaim) any obligation and
do not intend to publicly update or review any of these
forward-looking statements, whether as a result of new information,
future events or otherwise.
No Offer or Solicitation
This press release is not intended to and does not constitute an
offer to sell or the solicitation of an offer to subscribe for or
buy or an invitation to purchase or subscribe for any securities or
the solicitation of any vote in any jurisdiction pursuant to the
proposed transactions or otherwise, nor shall there be any sale,
issuance or transfer of securities in any jurisdiction in
contravention of applicable law. No offer of securities shall be
made except by means of a prospectus meeting the requirements of
Section 10 of the Securities Act. Subject to certain exceptions to
be approved by the relevant regulators or certain facts to be
ascertained, the public offer will not be made directly or
indirectly, in or into any jurisdiction where to do so would
constitute a violation of the laws of such jurisdiction, or by use
of the mails or by any means or instrumentality (including without
limitation, facsimile transmission, telephone and the internet) of
interstate or foreign commerce, or any facility of a national
securities exchange, of any such jurisdiction.
Additional Information and Where to Find It
This press release is being made in respect of the proposed
transaction between the Company and BlueHalo. In connection with
the proposed transaction, the Company will file with the SEC a
registration statement on Form S-4, which will include a proxy
statement and a prospectus, to register the shares of the Company
stock that will be issued to BlueHalo’s shareholders (the “Proxy
and Registration Statement”), as well as other relevant documents
regarding the proposed transaction. INVESTORS ARE URGED TO READ IN
THEIR ENTIRETY THE PROXY AND REGISTRATION STATEMENT REGARDING THE
TRANSACTION WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT
DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR
SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION.
A free copy of the Proxy and Registration Statement, as well as
other filings containing information about the Company, may be
obtained at the SEC’s website (http://www.sec.gov). You will also
be able to obtain these documents, free of charge, from the Company
at https://investor.avinc.com/ or by emailing ir@avinc.com.
Participants in the Solicitation
The Company and its respective directors and executive officers
may be deemed to be participants in the solicitation of proxies
from its respective stockholders in respect of the proposed
transactions contemplated by the Proxy and Registration Statement.
Information regarding the persons who are, under the rules of the
SEC, participants in the solicitation of the stockholders of the
Company in connection with the proposed transactions, including a
description of their direct or indirect interests, by security
holdings or otherwise, will be set forth in the Proxy and
Registration Statement when it is filed with the SEC. Information
regarding the Company’s directors and executive officers is
contained in its Annual Report on Form 10-K for the year ended
April 30, 2024 and its Proxy Statement on Schedule 14A, dated
August 12, 2024, which are filed with the SEC.
1 All revenue figures for BlueHalo are presented as if all
acquisitions made by BlueHalo and companies acquired by BlueHalo
had been owned by BlueHalo for the entirety of the applicable
calendar year, irrespective of the actual date of acquisition.
Amounts will differ from revenue figures reported for BlueHalo
under GAAP, which will only include revenue from and after the
applicable date of acquisition. Amounts will also differ from any
presentation made under Article 11 of Regulation S-X, which would
not require inclusion of certain insignificant or immaterial
acquisitions.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241119519687/en/
For AeroVironment:
Investors Jonah Teeter-Balin +1 (805) 520-8350 x4278
https://investor.avinc.com/contact-and-faq/contact-us
Media Joseph Sala / Woomi Yun / Jenna Shinderman Joele
Frank, Wilkinson Brimmer Katcher +1 (212) 355-4449
For BlueHalo:
Paul Frommelt paul.frommelt@bluehalo.com +1 (703) 609-9721
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