Shield AI to acquire counter-drone radar maker Echodyne in $5.3 billion deal

Defense technology company Shield AI agreed to buy Echodyne, which makes radars for detecting drones, for $5.3 billion, the companies said. The transaction is expected to close in early 2027 and will give Shield an in-house counter-drone offering, according to a company statement.

Of the total, $4.8 billion will be paid at closing, while a further $500 million depends on Echodyne meeting agreed performance targets. Army Technology reported that Echodyne shareholders will receive the closing payment in cash and shares, and that the deal is subject to regulatory approvals and other customary conditions.

Financing

Shield said the acquisition will be financed through $2.5 billion of new funding. According to Army Technology, this includes a $1 billion Series H equity round, a $1 billion structured equity investment managed by Blackstone funds and $500 million of debt arranged by JPMorgan Chase Bank.

Shield said the Series H round values the company at $28.8 billion after the investment. Army Technology reported that each company expects revenue growth in the triple digits this fiscal year, though they gave no revenue figures or forecasts for the combined business.

What Echodyne brings

Echodyne, based in Kirkland, Washington, designs and manufactures compact solid-state radars built on its patented Metamaterials Electronically Scanned Array technology, according to Army Technology. Its radars are used to detect and track drones and to support measures to defeat them. Shield said the products will remain available as standalone systems.

Echodyne says customers in more than 40 countries, across defense, government and commercial sectors, use its counter-drone systems. In September, the Pentagon's Joint Interagency Task Force 401 selected its radar to supply counter-drone systems to the US military, with a contract ceiling of $250 million, according to Army Technology.

The deal adds manufacturing capacity in Washington state, where Echodyne recently opened an 86,350-square-foot facility after a $40 million investment. The site is expected to produce about 30,000 radars a year, according to Army Technology.

Fit with Shield's portfolio

Shield's product range includes Hivemind, an autonomy software package, simulation tools from Aechelon, and the V-BAT and X-BAT drones, Army Technology reported. Breaking Defense reported that the company has a history of growth through acquisition, including its 2021 purchase of Martin UAV, the source of the V-BAT, and the purchase of Aechelon Technologies earlier this year.

“The acquisition of Echodyne dramatically accelerates our efforts to meet growing customer demand for multi-mission capabilities, provides increased access to a rapidly expanding counter-drone industry, and further diversifies our revenue streams with sustained, compelling growth for the combined company.”

Gary Steele, Shield CEO

Echodyne will operate as a business unit within Shield's mission systems business. Its CEO, Eben Frankenberg, will report to Steele as part of Shield's executive team. A Shield spokesperson told Breaking Defense there are no planned workforce reductions and employees will not have to relocate.

“Shield shares our view that autonomous systems can only act on what they can sense, and superior sensors lead to superior systems and outcomes.”

Eben Frankenberg, Echodyne CEO

The spokesperson said Shield is not announcing specific aircraft integrations now, and that the deal does not affect its recent decision to work with RTX on a radar for the X-BAT, which the spokesperson called separate from the acquisition. The spokesperson also said Shield expects further acquisitions to feature in its growth plans.