Aerodrome Heads to the U.S. – Is This Merger a Game-Changer or Just Smoke and Mirrors?
The company signed a non-binding term sheet to acquire a U.S. drone firm in a deal valued at a minimum of $32 million. Where will the money come from? And does this signal struggles in fulfilling its major order?
Aerodrome announced it has signed a non-binding term sheet to acquire a U.S. drone company that provides solutions and products to government agencies, security organizations, and civilian customers. The deal is expected to
be financed through a combination of cash and stock, with the target company’s valuation set at no less than $32 million. Aerodrome will pay 40%-45% in cash—at least $18 million—while the remaining amount will be settled in shares allocated to the target company’s
shareholders.
Where will the $18 million come from? Aerodrome doesn't have that kind of cash on hand. Why pursue such a deal while seemingly being in a strong position with large
orders secured? It raises questions. There are many uncertainties surrounding Aerodrome. The company, a long-time player in the drone industry, should have been thriving, yet its core business—providing drone services to various companies—has been shrinking.
Surprisingly, it shifted focus to manufacturing drones. But why?
After announcing a major deal to supply drones worth 137 million shekels (roughly $38.5 million), Aerodrome has
since reported smaller deals that suggest its potential isn't as big as initially thought. This includes launching a manufacturing operation in which it doesn't hold full control.
Can Aerodrome Really Acquire a Larger Company?
Now, Aerodrome is preparing to buy a company that is bigger than itself in terms of valuation. How will that happen? That’s a question for CEO Roy Dagani, who has yet to respond
to our request for an interview.
Perhaps this all connects—maybe the acquisition is the answer to how Aerodrome intends to fulfill its massive 137-million-shekel drone order despite
lacking in-house manufacturing capabilities. Could buying an established firm be the missing piece?
According to the term sheet, the target company is a U.S.-based drone provider
operating in multiple markets. It runs a large technical support center in the U.S. and serves a diverse customer base. Acquiring it could significantly expand Aerodrome’s presence in the U.S. and give it new distribution channels.
The deal is contingent on due diligence, regulatory approvals, and securing financing for the cash component. Aerodrome plans to fund it through equity issuance, a combination of equity and debt financing (up
to 30%), or other financial instruments. The target company’s controlling shareholders have committed to remaining in management roles for at least four years.
If completed, this
acquisition could enhance Aerodrome’s foothold in the U.S. drone market and open new customer opportunities. The target company has agreed to an exclusivity period until May 1, 2025, meaning it won’t negotiate with other potential buyers during this time.
Aerodrome delayed announcing the deal until certain regulatory and legal constraints were cleared, which could have impacted its terms or completion. The acquisition aligns with Aerodrome’s
strategy to expand in the U.S., a goal it set back in 2022.
Is Aerodrome Searching for a Lifeline?
A few months ago, Aerodrome secured a major
order worth 137 million shekels to supply drones and related products to a government customer. The timing of today’s announcement suggests the company is looking for a lifeline—a move that could help it fulfill existing orders. Any delay in delivering the
order could impact the company's growth trajectory.
Aerodrome isn’t a new player on the stock exchange. It has demonstrated sales capabilities and has secured significant orders.
The company recently signed an MoU to establish a UAV manufacturing plant in partnership with an Israeli defense company. On paper, its potential is huge—yet its stock price does not reflect that.
The market remains skeptical that Aerodrome can execute its orders and generate meaningful profits. Investors seem to be judging the company with extreme caution. With a market cap of just 75 million shekels, its stock initially rose following the massive
order announcement but has since fallen back.
The company is still unprofitable, though that’s common in the sector. The large order is supposed to propel Aerodrome into profitability,
as it exceeds its current sales by a significant margin. However, failing to meet delivery schedules and customer expectations could be disastrous. If the U.S. acquisition goes through, it could provide Aerodrome with a fresh start—perhaps even a much-needed
escape route into a new phase of growth.
One of the biggest Nike franchisees is Israeli, here's how the relationship works
Retailors jumped following Nike’s surge on Wall Street; as a key Nike franchisee, Retailors benefits from Nike’s success but also feels the impact of its weaknesses. After a tough year, Nike is under new leadership aiming to get the company back on
track. Meanwhile, Retailors continues to strengthen its partnership with Nike, including an expansion into France
Nike’s stock surged on Wall Street, and in Tel Aviv—Retailors was rising. The connection between the two isn’t new, and it’s expected to continue shaping Retailors’ trajectory. Nike accounted for 68% of Retailors’ revenue in
the first nine months of 2024, and Retailors is one of Nike’s largest franchisees worldwide. Beyond its stores in Israel, the company operates Nike stores in Canada, Australia, New Zealand, and various European countries—and has recently expanded into France.
In many ways, Retailors is Nike. While the company holds franchise rights for additional brands like Foot Locker, Champion, and Converse, Nike is its dominant business—both financially
and in terms of brand perception. That means when Nike soars, Retailors benefits, and when Nike stumbles, Retailors takes a hit.
Nike’s Decline and Recovery
Nike’s stock had a rough year. Under its former CEO, John Donahoe, the company prioritized online sales at the expense of physical retail. The strategy worked well during COVID, but as consumers returned to malls, Nike lost shelf space to emerging brands
like On and Hoka.
The major downturn came in June, when Nike issued a weak revenue forecast for the upcoming year. The stock plunged 20% in a single day, dragging Retailors down
with it, causing a 10% drop on the Tel Aviv exchange.
Now, Nike is under new-old leadership. Elliott Hill, who spent 32 years at the company before retiring in 2020, has been called
back as CEO. The expectation is that Hill will refocus on physical retail, a strategy that could restore investor confidence and lift Nike’s stock, which is currently trading at its pandemic-era price levels.
