By Sabela Ojea

Shares of Redwire surged a day after the company said it's buying military drone manufacturer Edge Autonomy for $925 million.

The stock rose 39% to $20.46 to a new 52-week high in Tuesday morning trading. Shares are up 22% year to date.

The aerospace manufacturer and space infrastructure technology company said it would finance the using $150 million in cash and $775 million in shares of its commons stock.

The company said its board of directors has approved the transaction, which is expected to close in the second quarter.

Analysts at Alliance Global Partners said Redwire made a good move with the acquisition, noting that Edge Autonomy's Group 2 drones are disrupting the market due to its IP around batteries, which results in unmatched range and duration compared with its competitors. They reiterated a buy rating and raised their price target on Redwire's shares to $24 from $16.

"We argue the announcement of the Edge Autonomy deal creates a much stronger investment thesis [for Redwire,]" the analysts said in a note. "The end results is a company that is competitively positioned both for space infrastructure and unmanned combat-proven drones, and with the scale to consistently be profitable and generate solid cash flow with a solid margin profile."

Write to Sabela Ojea at sabela.ojea@wsj.com; @sabelaojeaguix

(END) Dow Jones Newswires

January 21, 2025 12:07 ET (17:07 GMT)

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