Leonardo DRS to acquire Raft for $450M

Leonardo DRS has agreed to acquire defense software integrator Raft for $450 million in cash as part of a push to incorporate data fusion and artificial intelligence into military systems.

Raft CEO Shubhi Mishra started the company in 2018 to build open architecture software with AI and data integration functions built into the product. The idea is to give operators a single, common operating picture and reduce cognitive burdens on users by automating much of the data collection and fusion work.

In its Tuesday announcement, Leonardo DRS said it is looking to build out its advanced sensing and network computing product portfolio with the addition of Raft. All parties involved expect the transaction to close in the fourth quarter of this year.

“Our customers increasingly require integrated hardware, software, data and autonomy to support mission outcomes. The acquisition of Raft will build on and accelerate the organic investment that DRS has made in that evolution,” Leonardo DRS CEO John Baylouny said in a release. “Raft adds proven software talent and open-architecture technology that complement our existing sensing and computing capabilities and strengthen our ability to deliver AI-enabled mission solutions at the speed our customers demand.”

Leonardo DRS’ advisers for the transaction are Morgan Stanley, Sullivan & Cromwell LLP, Kirkland & Ellis LLP and Kilpatrick Townsend & Stockton LLP. Raft’s advisers are J.P. Morgan Securities and Greenberg Traurig LLP.

Executives at Leonardo DRS plan to detail the rationale behind this transaction during the company’s second quarter earnings conference call with investors on Thursday.

Raft has been backed by the investment firm Washington Harbour Partners for the past two years, during which the company has pushed to further scale out its research-and-development efforts.

Mishra has appeared twice on our WT 360 podcast, first in 2022 and then again in 2024 following the agreement with Washington Harbour Partners.