Redwire Corporation ( RDW ) shares are trading higher premarket on Tuesday. On Monday, the company inked a deal to acquire Edge Autonomy for $925 million.

Formed in 2021 through the merger of UAV Factory and Jennings Aeronautics, Edge Autonomy provides field-proven uncrewed airborne system technology.

The transaction includes $150 million in cash and $775 million in Redwire ( RDW ) common stock, based on a 30-day volume-weighted average trading price of $15.07.

Redwire ( RDW ) may finance the cash portion using its balance sheet, existing credit facility, or new committed debt facilities, leveraging the expected boost in Adjusted EBITDA and free cash flow.

The company also has the option to raise funds through a new equity issuance, with the issuance price adjusting based on the per-share price of the offering.

The acquisition of Edge Autonomy’s UAS technology expands Redwire’s multi-domain coverage, creating integrated solutions that enhance connectivity between space and airborne operations.

The transaction is expected to close in the second quarter of 2025, subject to customary approvals and closing conditions.

Post transaction closure, Edge Autonomy and its subsidiaries will become wholly owned by Redwire ( RDW ).

At closing, Redwire ( RDW ) will amend its Investor Rights Agreement with AEI, Genesis Park Holdings, and Edge Autonomy Ultimate Holdings.

AEI can appoint four directors to Redwire’s Board, reducing if its ownership drops below 50%. Seller can appoint one director as long as it holds at least 25% of its shares.

The agreement also includes a six-month lock-up on share sales for AEI and Seller, with some exceptions.

The deal is expected to be immediately accretive to revenue, Adjusted EBITDA, and Free Cash Flow.

For 2025, the combined company forecasts revenue of $535 million – $605 million and Adjusted EBITDA of $70 million – $105 million, with positive Free Cash Flow, assuming the transaction closed on January 1, 2025.

As of September 30, 2024, the company had $43.09 million in cash and equivalents.

Last week, Redwire ( RDW ) disclosed the successful delivery of the fourth pair of Roll-Out Solar Array wings for the International Space Station.

Price Action: RDW shares are up 11.1% at $16.40 premarket at the last check Tuesday.

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