AeroVironment to Acquire Arcturus UAV, Expanding Product Portfolio and Reach into Group 2 and 3 Unmanned Aircraft Systems Segments

AeroVironment, Inc. (NASDAQ: AVAV), a global leader in unmanned aircraft systems, and Arcturus UAV, Inc., a privately-held leading provider of Group 2 and 3 unmanned aircraft systems (UAS) and services, today announced that they have entered into a definitive agreement under which AeroVironment will acquire Arcturus UAV for a total purchase price of $405 million, including $355 million in cash and $50 million in AeroVironment stock.  The transaction, which was unanimously approved by the AeroVironment and Arcturus UAV Boards of Directors, is expected to accelerate AeroVironment’s strategy to drive profitable growth and value by expanding into attractive adjacent segments and by broadening its capabilities and customer footprint.

Founded in 2004 and based in Petaluma, California, Arcturus UAV has approximately 270 employees, designs and manufactures Group 2 and Group 3 UAS and provides related services, including contractor-owned, contractor-operated (COCO) services. Arcturus UAV is a leading supplier to the USSOCOM, supporting its $1.4 billion MEUAS III and IV programs, and one of four awardees selected for funded development and demonstrations supporting the U.S. Army’s FTUAS program, a potential billion dollar, and next-generation UAS program. Arcturus UAV has a demonstrated track record of solid performance, with topline growth exceeding 20 percent for each of its last two fiscal years.

“We are excited about the opportunities for value creation through our acquisition of Arcturus UAV, which will enable us to accelerate our growth strategy and expand our reach into the more valuable Group 2 and 3 UAS segments,” said Wahid Nawabi, AeroVironment president and chief executive officer. “Group 2 and 3 UAS and services, collectively, potentially represent more than one billion dollars in annual contract value, according to an independent forecast. Combining our highly complementary products and technologies will enhance our portfolio, deliver top and bottom-line growth, and enable us to provide customers with a complete set of Group 1 through 3 UAS, tactical missile systems, high-altitude pseudo-satellites and unmanned ground vehicle solutions. Through this expanded portfolio, we will be well positioned to serve a broader range of customer missions across multiple domains and significantly enhance value for shareholders over the near and long-term.”

“The Arcturus UAV team has produced strong growth in recent years and has secured strategically important wins in the MEUAS and FTUAS programs, positioning Arcturus as a leader for next-generation program requirements. Together, we will offer an unmatched portfolio of multi-domain unmanned capabilities, supported by our ongoing investments in artificial

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