Redwire shares leap on acquisition news

Investing.com -- Redwire Corporation (NYSE:RDW ) stock surged 12% following the company's announcement that it has signed an agreement to acquire Edge Autonomy, a leader in uncrewed airborne system technology. The acquisition, valued at $925 million, is expected to significantly enhance Redwire's position in the multi-domain autonomous technology sector.

The deal, which involves a payment mix of $150 million in cash and $775 million in Redwire common stock, is anticipated to be immediately accretive to Redwire's revenue, Adjusted EBITDA, and Free Cash Flow upon closing. Redwire forecasts that the combined company will generate revenues between $535 million and $605 million, with Adjusted EBITDA ranging from $70 million to $105 million for the twelve months ending December 31, 2025, assuming the transaction was completed at the start of the year.

Edge Autonomy brings to Redwire a wealth of experience in developing autonomous technology systems, with strong ties to the U.S. Department of Defense and allied governments. The acquisition is set to broaden Redwire's portfolio of space platforms and enhance its capabilities in low Earth orbit, medium Earth orbit, and geostationary orbit operations. The addition of Edge Autonomy's combat-proven technologies is expected to create integrated solutions for multi-domain operations extending from Earth's surface to the moon and beyond.

Peter Cannito, Chairman and CEO of Redwire, commented on the strategic fit of the acquisition, highlighting the convergence of space and airborne platforms into a network of autonomous, collaborative systems. Steve Adlich, CEO of Edge Autonomy, also expressed enthusiasm for the merger, emphasizing the shared commitment to innovation and customer satisfaction between the two companies.

The transaction is subject to customary approvals, including a Redwire stockholder vote and regulatory clearances, with an expected closure in the second quarter of 2025. Redwire has the option to finance the cash portion of the purchase price through various means, including cash on hand, existing credit facilities, or new debt facilities, capitalizing on the anticipated expansion of its Adjusted EBITDA and free cash flow.

Redwire's Board of Directors and a special committee have approved the transaction, with key shareholders also agreeing to vote in favor of the transaction proposals. A conference call to discuss the transaction details is scheduled for 9:00 a.m. ET on Tuesday, January 21, 2025.

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Source: Investing.com