AeroVironment To Snap Up Arcturus UAV In $405M Deal

AeroVironment has agreed to acquire private firm Arcturus UAV for $405 million. The defense contractor has offered to pay $355 million in cash and $50 million in AeroVironment shares.

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AeroVironment (AVAV) said that the purchase of Arcturus, which provides unmanned aircraft systems (UAS) and services, will help the company expand its customer penetration, broaden its capabilities to drive profitable growth, and boost its shareholders’ value.

Notably, “Arcturus UAV is well positioned for ongoing United States Special Operations Command (USSOCOM) Mid-Endurance UAS (MEUAS) task orders, United States Army Future Tactical UAS (FTUAS) program delivery orders and international contracts,” the company said.

The Arcturus deal is likely to be immediately accretive to the company’s revenues, EBITDA, and adjusted earnings, the company said. (See AVAV stock analysis on TipRanks).

Earlier on Dec. 10, Raymond James analyst Brian Gesuale said, “Looking ahead, we have a high level of confidence in AeroVironment’s ability to hit its full-year bogey given roughly 83% of the midpoint is in hand, which should provide the lead time to grind past any COVID supply chain friction.” The analyst maintained a Hold rating on the stock.

Overall, consensus among analysts is a Moderate Buy based on 2 Buys and 1 Hold. The average analyst price target of $101.50 implies upside potential of about 5.5% to current levels. Shares have gained 38.1% over the past year.