Deal Details

Baird Leads Kratos' $1.2 Billion Follow-On Offering

Industrial

Kratos follow-on offering

Summary

Baird served as lead bookrunner for Kratos Defense & Security Solutions, Inc. (“Kratos” or the “Company”) (NASDAQ: KTOS) on its recently announced upsized underwritten public offering of 14,285,714 shares of its common stock at a public offering price of $84.00 per share (the “Offering”). The Offering generated gross proceeds to Kratos of approximately $1.2 billion. The underwriters have been granted a 30-day option to purchase up to an additional 2,142,857 shares of Kratos’ common stock.

Kratos intends to use the net proceeds from the Offering to (i) continue to make important capital expenditures to scale operations and meet the growing demands of The Department of War and National Security customers with respect to existing programs, recently awarded contracts, and new opportunities, (ii) continue to invest in new product, system, and software product development, including building and being first to market with National Security Systems, including in coordination with Kratos’ customers and partners, (iii) strengthen the Company's balance sheet to allow Kratos to be responsive to anticipated contract awards from our large, strategic pipeline of opportunities, (iv) fund the recent acquisition of Nomad, pending the acquisition of Orbit and select future strategic M&A opportunities, and (v) for general corporate purposes, including to pay fees and expenses in connection with this Offering.

About

Kratos is a technology, hardware, products, system, and software company addressing the defense, national security, and commercial markets. Kratos makes true internally funded research, development, capital, and other investments, to rapidly develop, produce, and field relevant solutions that address customers’ mission critical needs and requirements. At Kratos, affordability is a technology and the Company seeks to utilize proven, leading-edge approaches and technology, not unproven bleeding edge approaches or technology, with Kratos’ approach designed to reduce cost, schedule, and risk, enabling the Company to be first to market with cost effective solutions. It’s believed that Kratos is known as the innovative disruptive change agent in the industry, a Company that is an expert in designing products and systems up front for successful rapid, large quantity, low-cost future manufacturing, which is a value-add competitive differentiator for the Company’s large traditional prime system integrator partners and also to their government and commercial customers. Kratos intends to pursue program and contract opportunities as the prime or lead contractor when it is believed the probability of win is high and any investment required by Kratos is within the capital resource comfort level. Kratos intends to partner and team with a large, traditional system integrator when the assessment of probability of win is greater or required investment is beyond Kratos’ comfort level. Kratos’ primary business areas include, virtualized ground systems for satellites and space vehicles including software for command & control (C2) and telemetry, tracking and control (TT&C), jet powered unmanned aerial drone systems, hypersonic vehicles and rocket systems, propulsion systems for drones, missiles, loitering munitions, supersonic systems, space craft and launch systems, command, control, communication, computing, combat, intelligence surveillance, and reconnaissance (C5ISR), and microwave electronic products for missile, radar, air defense, missile defense, space, satellite, counter unmanned aircraft systems (CUAS), directed energy, communication, and other systems and virtual & augmented reality training systems for the warfighter. Kratos is headquartered in San Diego, California.

Industrial

Kratos follow-on offering