Defence technology company Shield AI has agreed to buy radar maker Echodyne in a deal valued at up to $5.3 billion, in one of the largest consolidations yet in the fast-growing market for counter-drone systems.

The San Diego-based company announced on 5 November that it had entered into a definitive agreement to acquire Echodyne Corp, based in Kirkland, Washington. Of the total value, $4.8 billion will be paid and issued at closing, with up to a further $500 million depending on Echodyne meeting agreed financial performance targets. The deal is expected to close in early 2027, subject to regulatory approvals and other customary closing conditions.

Shield AI is raising $2.5 billion to support the transaction. That includes $1 billion in Series H funding at a $28.8 billion post-money valuation, a $1 billion structured equity investment from funds managed by Blackstone, and $500 million in debt financing led by JPMorgan Chase. The Series H round is co-led by Disruptive and Innovation X Capital, and its proceeds will be used principally to fund the acquisition.

Echodyne designs and manufactures compact, solid-state radars using its patented Metamaterials Electronically Scanned Array, or MESA, technology. Its radars are built into hundreds of counter-drone and security systems used by defence, government and commercial customers in more than 40 countries. The radars detect, track and help defeat drones, and are integrated onto remote weapon stations, high-energy lasers and high-power microwave systems, where they cue interceptors towards incoming drones.

Civilian operators use the same radars to protect stadiums and airports from unauthorised drones and to let police and fire departments fly their own drones safely in shared airspace. In September, Echodyne received a contract with a $250 million ceiling from the US Army's Joint Interagency Task Force 401 to supply counter-drone radar to US and allied forces.

For Shield AI, the deal adds the sensing layer to a business built on autonomy. The company is known for its Hivemind autonomy software and its V-BAT and X-BAT autonomous aircraft, and it also owns Aechelon simulation technology. Chief executive Gary Steele said the company was building three mutually supporting business units — autonomy software, autonomous systems and mission systems — and that the Echodyne acquisition would accelerate its push into multi-mission work and diversify revenue beyond software alone.

"We are building a new-generation defense technology company," Steele said, adding that the deal "dramatically accelerates our efforts to meet growing customer demand" and gives the company increased access to a rapidly expanding counter-drone industry.

Echodyne chief executive Eben Frankenberg said autonomous systems "can only act on what they can sense" and that superior sensors lead to superior outcomes. He will report directly to Steele and remain responsible for Echodyne's products, manufacturing operations and partner engagement. The Echodyne team will stay in place, and its MESA radars will remain available as standalone products.

The acquisition also extends Shield AI's presence in Washington state, where it named the production home for its X-BAT autonomous jet in September. Echodyne recently opened an 86,350-square-foot manufacturing facility in Kirkland, a $40 million investment able to produce about 30,000 radars a year.

Both companies said they expected triple-digit revenue growth this fiscal year. The deal is Shield AI's third acquisition since April 2025, when it bought an autonomy software business from Crowdbotics, and follows its March 2026 purchase of Aechelon Technology, which added simulation and synthetic reality capabilities.

J.P. Morgan Securities acted as exclusive financial adviser to Shield AI, with Wachtell, Lipton, Rosen and Katz as legal adviser. Morgan Stanley and Robert W. Baird advised Echodyne, with Fenwick and West as its legal adviser.