Kratos Defense and Security Solutions Inc. said it is expanding its jet-powered drone business by opening a factory in Oklahoma.

The new Oklahoma City facility will complement its Sacramento drone factory, a former freestanding business called Composite Engineering Inc., which Kratos bought in 2012 for $155 million.

University City-based Kratos (Nasdaq: KTOS) expects its new Oklahoma City facility to produce tactical unmanned aircraft, and handle overflow production of its target drones from Sacramento.

The business said Jan. 26 that it will initially open 8,800 square feet of engineering and production planning offices at a site near Tinker Air Force Base. Within six months, the company said, it plans to expand into a 75,000-square-foot facility. Kratos said it expects to employ more than 350 people in Oklahoma in the next few years.

Kratos will receive incentives from the state for setting up business in Oklahoma, said a representative of Gov. Mary Fallin. They include tax credits as well as cash payments of up to 5 percent of new taxable payroll. The aerospace engineering tax credit doubles if the engineer graduated from an Oklahoma university.

Kratos is beginning production of its BQM-167 aircraft for the U.S. Army this year. The U.S. Air Force has used it since the middle of the first decade of the 2000s. Kratos said customers want to phase out older MQM-107 aircraft.

Kratos announced a $23 million unmanned aerial drone system production award from an unnamed customer in early January, and a $93 million contract to supply target drones to the Army. The most recent contract makes Kratos the sole supplier of jet-powered, sub-scale target drones to all branches of the U.S. military.

Kratos’ tactical drone systems can act as a “loyal wingman” to a manned fighter — or operate by themselves.