AeroVironment has entered into a definitive agreement that will result in the company acquiring Arcturus UAV for a total purchase price of $405 million, including $355 million in cash and $50 million in AeroVironment stock.

AeroVironment says that it expects the transaction to accelerate its strategy to drive profitable growth and value by expanding into attractive adjacent segments and by broadening its capabilities and customer footprint.

“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,” says Wahid Nawabi, AeroVironment president and chief executive officer.

Founded in 2004, Arcturus UAV designs and manufactures Group 2 and Group 3 UAS. The Petaluma, California-based company provides related services, including contractor-owned, contractor-operated (COCO) services.

Arcturus UAV is a leading supplier to the USSOCOM, providing support for its $1.4 billion MEUAS III and IV programs. The company was one of four awardees selected for funded development and demonstrations supporting the U.S. Army’s FTUAS program, a potential billion dollar, next-generation UAS program.

“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,” Nawabi adds.

“Together, we will offer an unmatched portfolio of multi-domain unmanned capabilities, supported by our ongoing investments in artificial intelligence and autonomy, to help our customers address a broad set of defense and commercial missions.”

Arcturus UAV’s products include a multi-mission, medium endurance vertical takeoff and landing (VTOL) system called JUMP-20, which requires no launch equipment or runway. The company also manufactures a multi-mission, medium endurance catapult-launched system called T-20.

Arcturus UAV sells its products directly to end users and delivers COCO services. All Arcturus UAV systems have the ability to carry a variety of payloads, including standard EO/IR gimbals as well as 3-D mapping, SAR, lidar, communications relay, COMINT and SIGINT payloads.