Shield has agreed to acquire radar manufacturer Echodyne for $5.3bn, in a deal that will expand its mission systems business into counter-drone sensing and related security applications.
The transaction will be financed through $2.5bn of new funding, including a $1bn Series H equity round, a $1bn structured equity investment managed by Blackstone funds and $500m of debt arranged by JPMorgan Chase Bank.
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Shield said the Series H round values the company at $28.8bn after the investment. The financing will be used primarily to fund the acquisition.
Echodyne shareholders will receive $4.8bn at closing, comprising cash and shares, while a further $500m will depend on the acquired company meeting agreed performance targets.
The deal is expected to close in early 2027, subject to regulatory approvals and other customary conditions.
The companies said both expect triple-digit revenue growth in the current financial year, although they did not provide revenue figures or forecasts for the combined business.
Echodyne supplies radar systems used in counter-uncrewed aircraft systems, which detect and track drones and support measures to defeat them.
The company’s products are also used in security and airspace applications, with customers across defence, government and commercial markets in more than 40 countries, according to Shield.
The Kirkland, Washington-based company designs and manufactures compact solid-state radars based on its patented Metamaterials Electronically Scanned Array technology. Its products will remain available as standalone systems after the acquisition, Shield said.
Shield CEO Gary Steele said: “The acquisition of Echodyne dramatically accelerates our efforts to meet growing customer demand for multi-mission capabilities, provides increased access to a rapidly expanding counter-drone industry, and further diversifies our revenue streams with sustained, compelling growth for the combined company.”
Following the acquisition, Echodyne will become part of Shield’s Mission Systems business. Its chief executive, Eben Frankenberg, will report to Shield chief executive Gary Steele and remain responsible for the radar company’s products, manufacturing, partners and customers.
The acquisition will add manufacturing capacity in Washington, where Echodyne recently opened an 86,350ft2 facility following a $40m investment.
The site is expected to produce about 30,000 radars annually.
Echodyne received a contract in September from Joint Interagency Task Force 401, with a ceiling of $250m, to supply counter-drone radar to US and allied forces.
The company’s radars are integrated with remote weapon stations, high-energy lasers and high-power microwave systems, and are used to cue interceptors towards incoming drones.
Shield currently develops Hivemind autonomy software, Aechelon simulation systems and the V-BAT and X-BAT autonomous systems.
The company said the acquisition would add radar sensing to those existing activities.
Echodyne CEO Eben Frankenberg said: “Shield shares our view that autonomous systems can only act on what they can sense, and superior sensors lead to superior systems and outcomes.
“By joining Shield, we’re creating a company with the size and breadth to deliver even more value to our broad range of defence, government, and commercial customers around the globe.”
