Palladyne AI acquires defense companies for $31 million

Palladyne AI Corp. (NASDAQ: PDYN) announced the acquisition of GuideTech LLC and two Crucis companies for approximately $31 million to create a new defense division called Palladyne Defense.

The purchase price consists of $20 million in stock, $5 million in cash, and the assumption of $6 million in debt. GuideTech's owners may receive additional contingent consideration of up to $25 million over five years if cumulative revenue from GuideTech products and services exceeds $71 million.

The acquisitions are expected to more than triple Palladyne's 2024 revenue of $7.8 million by 2026. The acquired businesses are projected to be adjusted EBITDA positive in 2026, though the company plans to invest approximately $5 million over 12-18 months to advance GuideTech's loitering munitions systems to operational readiness.

GuideTech operates from Tucson, Kansas City and Huntsville with 32 employees, designing flight software, avionics and control systems for unmanned aerial platforms. The company develops the BRAIN avionics product, FLEX flight software suite, and autonomous munition projects including Banshee and SwarmStrike.

The Crucis Companies, comprising Warnke Precision Machining and MKR Fabricators, provide precision machining and fabrication services for aerospace and defense programs including the F-16, F-35, Tomahawk and Bradley Fighting Vehicle systems.

"Through the creation of Palladyne Defense, we are transforming from an AI software innovator into a vertically integrated defense technology company," said Ben Wolff, President and CEO of Palladyne AI.

The combined companies bring an 18-month backlog of more than $10 million, according to the company statement.

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