M&AJul 28, 2026, 17:53 UTC

Leonardo DRS to buy defence software startup Raft for $450M

What's the deal? Leonardo DRS has agreed to acquire Raft in an all-cash transaction valued at $450 million. The deal, announced July 28, 2026, is expected to close in the fourth quarter of 2026, pending regulatory approvals.

Who are they? Leonardo DRS is an Arlington, Virginia-based defence technology company listed on the Nasdaq. Founded in 2018 and based in McLean, Virginia, Raft builds open-architecture mission software specialising in multi-domain data fusion and AI for national security customers.

The strategic rationale: Defence customers increasingly manage large volumes of data from distributed sensors, and fragmented architectures can slow decisions. Raft's software fuses disparate data into a common operating picture, complementing DRS's sensing and computing portfolio.

What they're saying: "Our customers increasingly require integrated hardware, software, data and autonomy to support mission outcomes," said John Baylouny, DRS president and chief executive officer. Raft founder and CEO Shubhi Mishra called the deal "a natural next step," adding the platform "was built to integrate across systems, not lock customers in."

The terms: The all-cash deal is subject to customary post-closing adjustments. DRS expects a tax benefit over the next 15 years worth roughly $50 million in present value, and the acquisition should be accretive to adjusted diluted earnings per share in the first full year.

How it's funded: DRS plans to pay through cash on hand and borrowings under its revolving credit facility. Morgan Stanley advised DRS; J.P. Morgan advised Raft.

The signal: Defence primes are buying software and AI capability to turn raw sensor data into faster decisions. The Raft deal shows hardware-led contractors racing to fold open-architecture software into integrated mission systems.