Defense technology company Shield AI has agreed to acquire radar maker Echodyne in a $5.3 billion deal and is raising $2.5 billion to support the purchase.
The financing includes $1 billion in Series H funding at a $28.8 billion post-money valuation, a $1 billion structured equity investment from funds managed by Blackstone and $500 million in debt financing, with JPMorgan Chase Bank as sole arranger, Shield AI said Thursday.
Disruptive and Innovation X Capital are co-leading the Series H, with participation from Advent, the Strategic Investment Group of JPMorganChase's Security and Resiliency Initiative, Snowpoint Ventures, Apandion, Center15 Capital and others. Shield AI said the Series H proceeds will go mainly toward the acquisition.
Shield AI will pay $4.8 billion in cash and equity at closing, with up to $500 million more tied to Echodyne meeting performance targets. The deal is expected to close in early 2027, subject to regulatory approvals and other closing conditions. Shield AI told Bloomberg that the new financing will close alongside the acquisition and will not go ahead if the deal falls through.
The Series H valuation is more than double the $12.7 billion post-money valuation Shield AI announced in March. The company confirmed in June that it had closed that $2 billion financing package, which included $1.5 billion in Series G funding and $500 million in preferred equity.
What does Echodyne do?
Echodyne makes compact radars that detect and track drones. Shield AI said the radars are used in hundreds of counter-drone and security systems in more than 40 countries. Civilian customers also use them to protect airports and stadiums from unauthorized drones.
Shield AI has so far served only government end users, CEO Gary Steele told Bloomberg. Echodyne already sells to commercial customers as well as defense and government customers, giving Shield AI a way to reach buyers outside government.
"Shield shares our view that autonomous systems can only act on what they can sense," Echodyne CEO Eben Frankenberg said in the announcement. Steele said the deal would give Shield AI "increased access to a rapidly expanding counter-drone industry."
In September, Echodyne received a contract with a $250 million ceiling from Joint Interagency Task Force 401 to supply counter-drone radars to U.S. and allied forces. The Kirkland, Washington-based company recently opened a $40 million factory that will be able to produce about 30,000 radars a year.
The acquisition adds radar to Shield AI's mission systems business. Shield AI also develops Hivemind autonomy software and the V-BAT and X-BAT autonomous aircraft. Echodyne will continue selling its radars as standalone products, and Frankenberg will report to Steele. Both companies expect triple-digit revenue growth this fiscal year.