Leonardo DRS to acquire Raft for $450m in defence AI push
Leonardo DRS (Nasdaq: DRS) has signed a definitive agreement to acquire Raft LLC, a McLean, Virginia-based developer of open-architecture mission software, for $450 million in cash. The transaction is expected to close in the fourth quarter of 2026, subject to regulatory approvals and customary closing conditions.
Founded in 2018, Raft specialises in multi-domain data fusion and AI-driven situational awareness for US government and defence customers. Its platform fuses data streams from distributed sensors and systems into a common operating picture, with the stated goal of accelerating decision-making and reducing cognitive burden on operators across mission threads. The company's software is built on open standards rather than proprietary lock-in, which the parties say makes it portable across existing sensing and computing infrastructure.
The deal
DRS chief executive John Baylouny said the acquisition builds on the company's existing organic investment in hardware, software and autonomy integration. "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," Baylouny said.
Raft founder and chief executive Shubhi Mishra described the combination as a natural progression for her team, adding that pairing Raft's platform with DRS's sensing and computing franchises would accelerate capability delivery at global scale.
DRS said it expects the deal to be accretive to Adjusted Diluted Earnings Per Share in the first full year of ownership. The company will fund the transaction through cash on hand and drawings on its revolving credit facility. A tax benefit with a present value of approximately $50 million is anticipated to be realised over the next 15 years. No revenue or contract backlog figures for Raft were disclosed in the release.
Morgan Stanley advised DRS; J.P. Morgan served as exclusive financial adviser to Raft.
Market context
The acquisition reflects a broader consolidation trend in defence-technology software, where prime contractors and mid-tier integrators are buying software-native firms to compete for programmes that prioritise data fusion, AI-assisted command and control, and joint-domain interoperability. The US Department of Defense's Joint All-Domain Command and Control (JADC2) initiative continues to drive procurement of platforms that can aggregate sensor data across air, land, sea, space and cyber domains in near real time.
Raft operates in a competitive market that includes both large-prime software divisions and a cluster of well-funded startups offering cloud-native mission applications, data-mesh architectures and AI-inference pipelines tailored to classified environments. The emphasis on open-architecture design is increasingly a procurement differentiator, as government customers seek to avoid vendor lock-in and maintain the ability to swap components as technology evolves.
Regulatory and standards read-across
The transaction will require standard antitrust and national security review. Given that Raft's customer base is primarily US federal and defence agencies, a CFIUS filing is unlikely to present obstacles, but the timeline to Q4 2026 closing suggests DRS anticipates a straightforward regulatory path. Compliance with FedRAMP and DoD Impact Level authorisation frameworks will be relevant to any expansion of Raft's platform into new agency environments post-acquisition.
DRS has flagged the deal alongside its second-quarter 2026 earnings call, scheduled for 30 July, where analysts are likely to probe integration timelines, headcount retention for Raft's engineering team and the revenue contribution expected in 2027. Talent retention will be a key integration risk: open-architecture defence software firms often rely on small, highly specialised engineering teams whose departure could erode the capability DRS is paying to acquire.