Drone maker Unusual Machines' (UMAC +0.68%) stock soared above the rest of the market as the trading week kicked off. Mere days before the company was set to publish its latest quarterly earnings report, it announced a rather complementary acquisition. Investors greeted this by pushing the company's stock up by more than 14% that trading session.
An Unusual deal
Before market open, Unusual Machines announced that it signed a definitive agreement to acquire privately held DroneNX (doing business as Upgrade Energy). This is a business that specializes in battery and power solutions specifically developed for drones.
Image source: Getty Images.
Unusual Machines said the deal is valued at roughly $52 million, which is expected to be paid in cash and stock. It will also likely include performance-based earnouts for DroneNX. The company did not provide greater detail.
In the press release, it wrote that purchasing DroneNX/Upgrade Energy "adds battery expertise to Unusual Machines' domestic manufacturing and engineering operations, broadens the Company's capabilities by adding new drone components, and strengthens its domestic manufacturing capabilities."
NYSEMKT: UMAC
Key Data Points
Getting it done with drones
To me, this is a clear case of "making hay while the sun shines." Unusual Machines has been effectively capitalizing on the steeply rising popularity of drones, a trend reflected in its recent results. Its cash pile has grown steeply of late, reaching more than $103 million at the end of last year. Given that, this purchase seems both well within its means and a potentially major boost to its manufacturing effort.
