Shield AI to Buy Echodyne for $5.3 Billion, Raises $2.5 Billion

Shield AI Inc. agreed to acquire Echodyne Corp. in a transaction valued at $5.3 billion and raised $2.5 billion of equity and debt at a $28.8 billion valuation, pairing its autonomy software with a radar maker that has become a key supplier for counter-drone missions.

Under the definitive agreement announced Thursday, Shield will pay $4.8 billion at closing and up to $500 million more in contingent consideration. Echodyne, based in Kirkland, Wash., builds MESA electronically scanned array radars used to detect small aircraft and drones. In September it won a contract with a ceiling of $250 million from Joint Interagency Task Force 401, the Pentagon group charged with countering unmanned systems.

A layered financing

Shield financed the purchase and its own growth with three concurrent raises. A $1 billion Series H round, co-led by Disruptive and Innovation X Capital, valued the San Diego company at $28.8 billion post-money. Blackstone provided $1 billion of structured equity, and JPMorgan Chase arranged $500 million of debt as sole lead. The package gives Shield cash to close the deal and keep investing in software and manufacturing.

Eben Frankenberg, Echodyne’s chief executive, will remain and report to Shield Chief Executive Steele. The companies said the combination is meant to put radar sensing inside Shield’s Hivemind autonomy stack so drones and aircraft can find and track threats without relying only on cameras or external cueing.

Advisers and timing

JPMorgan Securities, Wachtell, Lipton, Rosen & Katz and Covington & Burling advised Shield. Morgan Stanley and Baird were financial advisers to Echodyne, with Fenwick & West as legal counsel. The companies expect the acquisition to close in early 2027, subject to regulatory and other customary conditions.

Defense contractors and startups have been racing to field systems that can spot and defeat cheap drones. Buying Echodyne gives Shield a sensor line it can sell alongside aircraft and software, and the $28.8 billion valuation underscores how quickly private capital is pricing autonomy businesses that already have government contracts.