Nukkleus Inc. ( NUKK ) shares soared on Tuesday after the company said it will acquire Israel-based Tiltan Software Engineering Ltd. in a $14 million deal. The acquisition, to be paid in a mix of cash and stock, is expected to close following regulatory approval and audited financials.

The announcement underscores growing demand for AI-powered simulation and GPS-denied navigation tools that help militaries operate in contested environments and reduce civilian risk.

Tiltan, a three-decade-old defense technology firm, develops synthetic data for machine learning, GPS-denied navigation for drones and unmanned systems, and immersive 3D environments for operational testing. Its clients include Israel Aerospace Industries, Elbit Systems ( ESLT ) , and Rafael Advanced Defense Systems, with multiple awards from Israel's Defense Ministry recognizing its innovation.

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"This partnership marks a major milestone in Nukkleus' ( NUKK ) expansion into high-value aerospace and defense technologies," CEO Menny Shalom said in a statement. He cited Tiltan's AI-driven simulation platforms and battlefield navigation systems as key drivers for positioning Nukkleus ( NUKK ) in the global market.

Payment terms include installments and shares placed in escrow to secure final settlement. Sellers will receive shares equal to 25% of the purchase price on the 180th day after closing, adjusted for market value. The structure is designed to balance flexibility with protection against price swings.

Nukkleus ( NUKK ) held Cash and cash equivalents of $1.519 million as of June 30, 2025.

The deal remains subject to approval from Israel's Defense Export Controls Agency. It follows Nukkleus' ( NUKK ) recent strategic European aerospace venture, which also boosted investor sentiment.

Sector ETFs, including the iShares U.S. Aerospace & Defense ETF and SPDR S&P Aerospace & Defense ETF ( XAR ) , track the industry's rapid evolution.

Price Action: NUKK shares are trading 39.2% higher at $6.78 at the last check on Tuesday.

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