Annual report [Section 13 and 15(d), not S-K Item 405]

Business Combinations

v3.25.4
Business Combinations
 12 Months Ended
Dec. 31, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Business Combinations
Note C – Business Combinations
Edge Autonomy Acquisition
On January 20, 2025, the Company entered into an agreement and plan of merger (as amended on February 3, 2025, and June 9, 2025, the “Merger Agreement”) with Edge Ultimate Holdings, LP, a Delaware limited partnership (“Ultimate Holdings”) to acquire 100% of the equity interests in Edge Autonomy Intermediate Holdings, LLC (together with its subsidiaries, “Edge Autonomy”), a leading provider of field-proven uncrewed airborne system (“UAS”) technology (the “Edge Acquisition”). On June 13, 2025, following the satisfaction of all regulatory approvals, including a stockholder vote, the acquisition was completed. Under the terms of the Merger Agreement Edge Autonomy emerged as the surviving entity and a wholly owned subsidiary of the Company. On the same day, the merger consideration was transferred, including $160.0 million in cash (“Cash Consideration”) and the issuance of 49,764,847 shares of the Company’s common stock (“Equity Consideration”). Common stock was held back from the Equity Consideration to fund post-closing purchase price adjustments, if any, in the amount of $5.0 million, valued at a price per share of $15.07. The Company funded the Cash Consideration using cash on hand and proceeds from its indebtedness. Refer to Note I – Debt for additional information on the Company’s outstanding debt.

The acquisition was accounted for as a business combination, whereby the excess of the consideration paid over the fair value of identifiable net assets was allocated to goodwill. The goodwill reflects the potential synergies and expansion of the Company’s offerings across product lines and markets complementary to its existing products and markets. For tax purposes, the goodwill is not deductible.

The following table summarizes the fair value of the consideration transferred and the estimated fair values of the major classes of assets acquired and liabilities assumed as of the acquisition date.
June 13, 2025
Cash consideration
 $ 160,000 
Fair value of common stock issued(1)
862,561 
Equity holdback
 5,000 
Payable to Seller
 2,171 
Less: Working capital adjustment
 5,000 
Purchase consideration
 $ 1,024,732 
Assets:
Cash
 $ 8,209 
Accounts receivable and other receivable
 10,716 
Contract assets
 69 
Inventory 61,378 
Prepaid expenses and other current assets 6,614 
Property, plant and equipment
 26,271 
Right-of-use assets 14,822 
Intangible assets
 298,100 
Total assets
 426,179 
Liabilities:
Accounts payable
 5,627 
Accrued expenses
 11,910 
Deferred revenue
 26,111 
Other current liabilities
 938 
Long-term operating lease liabilities 14,973 
Deferred tax liabilities 62,193 
Other non-current liabilities 1,019 
Total liabilities
 122,771 
Fair value of net identifiable assets acquired
 303,408 
Goodwill
 $ 721,324 
(1) Fair value of the common stock issued is based on the Company’s common stock closing price of $19.08 on the acquisition date,
June 13, 2025, less the fair value of the Edge Incentive Units of $87.0 million. Refer to Note R – Equity-Based Compensation for additional information on the Edge Incentive Units.

The following table summarizes the intangible assets acquired by class:
June 13, 2025
Weighted average useful life
in years
Customer relationships
 $ 15,400  8
Technology 264,800  13
Trade name and trademark
 17,900  8
Total intangible assets
 $ 298,100 

The amounts above represent the final valuation analyses completed to assess the fair values of the assets acquired and liabilities assumed and the amount of goodwill to be recognized as of the acquisition date. These fair values were based on management’s estimates and assumptions.

The fair values of identifiable intangible assets were determined by using certain estimates and assumptions that are not observable in the market. The fair value of the acquired technology and trademark and trade name was estimated using the relief from royalty method. The significant assumptions used to estimate the fair value included forecasted revenues, expected royalty rates, and discount rates. The fair value of the acquired customer relationships was estimated using the multi-period excess earnings method. The significant assumptions used to estimate the fair value of customer relationships included forecasted revenues, expected customer attrition rates, and discount rates.

The results of operations of Edge Autonomy have been included in the Company’s consolidated results of operations since the date of acquisition, June 13, 2025 and are reported in our Defense Tech segment. The table below presents the revenues and net income (loss) of Edge Autonomy included in the consolidated statements of operations and comprehensive income (loss) since the acquisition date, for the following periods:
Year Ended
  December 31, 2025
Post-acquisition revenues
 $ 107,114 
Net income (loss) attributable to Redwire Corporation (78,453)

Pro Forma Financial Data (Unaudited)
The table below presents the pro forma combined results of operations for the Company for the years ended December 31, 2025 and 2024, as though the acquisition of Edge Autonomy had been completed as of January 1, 2024.
Year Ended
December 31, 2025 December 31, 2024
Revenues
 $ 422,249  $ 499,084 
Net income (loss) attributable to Redwire Corporation (179,634) (232,633)
The amounts included in the pro forma financial information are based on historical results and do not necessarily represent what would have occurred if the Edge Acquisition had taken place as of January 1, 2024, nor do they represent results that may occur in the future. Accordingly, the pro forma financial information should not be relied upon as being indicative of the results that would have been realized had the business combination occurred as of the date indicated or that may be achieved in the future.

Other Acquisitions
On August 30, 2024, the Company acquired 100% of the equity interests of Hera Systems, Inc. (“Hera”), a spacecraft developer focused on specialized missions for national security space customers. Hera’s primary operations include developing high-performance spacecraft to support the evolving requirements for national security missions operating in contested space. Hera’s advanced platform incorporates cyber-secure communications, resilient power systems, highly accurate pointing, extensive maneuverability and massive on-board computing power supporting mission- and payload-specific machine learning. This acquisition was not material individually to the Company’s financial position nor the results of operations for the periods presented in the Company’s consolidated balance sheets and consolidated statements of operations and comprehensive income (loss), respectively. Therefore, the pro forma operating results and other disclosures for the Hera acquisition are not presented.
The Company incurred acquisition related costs for completed acquisitions of $21.0 million and $5.0 million during the years ended December 31, 2025 and 2024, respectively, and incurred nominal costs for the year ended December 31, 2023. These expenses are included in transaction expenses on the consolidated statements of operations and comprehensive income (loss).