Kratos Defense & Security Solutions [KTOS] this week said it has acquired the aerial target drone company Sierrea Technical Services, Inc. (STS), which is developing a next-generation aerial target for the Defense Department.
Kratos, in an Oct. 3 filing with the Securities and Exchange Commission, said it is issuing more than 1.8 million shares of its stock for the STS deal. Jefferies aerospace and defense analyst Sheila Kahyaoglu said Oct. 5 in a note to clients that the deal price is around $12.7 million and around $27 million after earnout and holdback provisions are factored.
In August, the Army Contracting Command awarded a $77.2 million Other Transaction Agreement to Advanced Technology International, Inc. as the managing prime to STS for the 5
th Generation Aerial Target (5GAT) prototype project. The project will refine the aerial target aircraft design to meet performance goals and for ground and flight testing of one or more prototypes.
If successful, the Army said it expects the government will award a follow-on production effort.
The military uses aerial target drones to test their weapon systems against live targets that are like adversary aircraft threats.
An earlier target prototype built by STS was integrated with the Army Ground and Aerial Target Control System (AGTACS) and successfully tested at Dugway Proving Ground, Utah, in 2020. The target drone and AGTACS met all ground test objectives but the aerial target was lost during its first flight test due do a software error. The Army said “the aircraft configuration and overall design is still considered to be sound.”
Kratos is already in the aerial target business offering several systems that emulate aircraft and ballistic missile threats for the DoD.
STS has 50 employees and is based in California.