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AEVEX Delivers Phoenix Ghosts, Grows Revenue to $500M

DEFENSE: Drone Aircraft Builder on a Hiring Spree

SOLANA BEACH – Having delivered 4,000 drones so far to Department of Defense clients, AEVEX Aerospace is building its business in the air, on the water and beyond.

The business is on track to take in more than half a billion dollars of revenue this year, CEO Brian Raduenz said recently. AEVEX has approximately 680 employees and is on a hiring push. As of Wednesday (June 12) the company had 73 help-wanted posts on its website.

Brian Raduenz
CEO
Aevex Aerospace

Raduenz said the business is expanding and winning new work.

The North County company is shipping more than 300 drones per month to the conflict in Ukraine. It builds its aircraft in Florida.

Another shop modifies small, manned aircraft for special purposes. It is located a 90-minute drive away from North County’s beaches at the French Valley Airport in Murietta.

In another offshoot of its drone business, AEVEX Aerospace is marketing an unmanned surface vehicle called the Mako USV. The business showed the watercraft at the Special Operations Forces trade show, held in early May in Tampa. The vehicle can travel at speeds up to 50 knots and can carry a variety of payloads.

Raduenz reported that there was “a great deal of interest” from U.S. and foreign customers.

A Market for Loitering Munitions

AEVEX Aerospace was in the public eye two years ago when hundreds of its Phoenix Ghost aircraft were rushed into service in the new conflict in Ukraine.

Phoenix Ghost is a loitering munition – essentially an inexpensive drone that can stay in the air for a while and detonate once the time was right. The aircraft can also be used for surveillance.

At the same time, the Pentagon was shipping Switchblade “kamikaze” drones from Arlington, Virginia-based Aerovironment (Nasdaq: AVAV) to Ukraine. The two aircraft are similar.

AEVEX’s tale of technology development shows a certain amount of give and take is necessary to work with the U.S. Department of Defense.

Raduenz recalled that on Super Bowl Sunday 2022, a group of his employees spent a good portion of their day figuring out how they might fulfill a Pentagon request for a loitering munition. The deal was not yet certain; Raduenz recalled his contacts at the Pentagon had to figure out whether they had funding to fulfill the requirements.

Half a world away in Europe, Russian military units were gathering on the border of Ukraine.

AEVEX Aerospace got a better idea of what the Pentagon wanted about a week later, on Feb. 22. Two days later, Russia moved into Ukraine. A couple of weeks passed, and then work at the Solana Beach company began in earnest. Raduenz said that by April 17, Easter Sunday, AEVEX learned that it was on contract.

AEVEX built 121 Phoenix Ghost drones. A July 2022 update from the Pentagon stated the United States would provide up to 580 more Phoenix Ghost drones to Ukraine, in addition to Aerovironment’s Switchblades.

Both sides in the Ukraine conflict are innovating much faster than they have in the past.

“We’re moving very quickly,” Raduenz said. As the situation changes, products are reengineered and redesigned, he said.

2024 Initiatives

These days, AEVEX Aerospace – which is majority owned by Madison Dearborn Partners of Chicago – features two different unmanned aircraft on its website.

The company publicly displayed its Atlas loitering munition for the first time in April at the 2024 Army Aviation Mission Solutions Summit in Denver. The 3-foot-long Atlas model can carry an 8-pound payload. The business also sells a larger drone named Dominator, which can carry a 37-pound payload.

One important selling point is that the drones (as well as the USV) have navigation technology that lets them reach their targets even if the adversary jams the GPS signal.

In the future, Raduenz said, AEVEX wants to add artificial intelligence and machine learning to its systems.

Competitor’s Drone Built in the Field

Separately, a Kearny Mesa startup called Firestorm has developed loitering munitions with an eye toward mass production.

The business can build a small, modular aircraft on a 3-D printer in less than nine hours.

The resulting aircraft can take on different roles, including but not limited to a “kinetic” role. The aircraft can also conduct intelligence, surveillance and reconnaissance, signals intelligence and electronic warfare.

In a project called xCell, Firestorm wants to bring 3-D printing technology close to the conflict by creating small, highly mobile factories. The business plans to outfit shipping containers with 3-D printers and related gear. Firestorm received a $1.25 million small business innovation research (SBIR) grant from the U.S. Air Force to develop the factory in the field. The deal runs from September 2023 through March 2025.

In March, Lockheed Martin Ventures led a $12.5 million seed round for Firestorm.

AEVEX Aerospace
FOUNDED: 2017, with the combination of Merlin Global Services, CSG Solutions and Special Operations Solutions
CEO: Brian Raduenz
HEADQUARTERS: Solana Beach
BUSINESS: Defense and aerospace contractor
REVENUE: ~$450 million in the trailing 12 months
EMPLOYEES: ~680 total with ~60 in Solana Beach
WEBSITE: aevex.com
CONTACT: 858-704-4125; info@aevex.com
NOTABLE: Raduenz said that both sides in the Ukraine conflict are innovating much faster than they have in the past; “We’re moving very quickly”

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