Ondas Shares Drop After Agreeing $33 Million Aran Defense Acquisition

Ondas Holdings Inc (NASDAQ:ONDS) witnessed a 4.9% decline in its shares during premarket trading on Tuesday following the confirmation of a deal to acquire Aran Defense for roughly $33 million. This acquisition is intended to enhance Ondas' manufacturing and engineering capabilities in Israel. The transaction entails a definitive agreement for Ondas to purchase Aran Defense Ltd., a defense-focused division of Israeli engineering and manufacturing firm Aran Ltd. (TASE:ARAN).

The value of the deal is set at around $33 million in cash or Ondas common stock, adjusted for customary factors such as working capital. Aran Defense is valued at approximately 1.3 times its projected 2026 revenue of $26 million.

Recent growth has been substantial for Aran Defense, with the firm generating about $17 million in revenue in 2025, up from $12 million in 2024, while maintaining a positive Adjusted EBITDA. Ondas anticipates the acquisition to conclude in the third quarter of 2026. The acquisition will equip Ondas with supplementary local engineering, integration, industrialization, and production resources as demand escalates for its autonomous defense operations.

Aran Defense occupies approximately 4,400 square meters of engineering and manufacturing facilities in Israel.

Eric Brock, Chairman and CEO of Ondas, commented, "As demand across our defense businesses continues to grow, expanding localized manufacturing capacity is becoming increasingly important to our ability to execute." The facilities offer a diverse array of capabilities, including CNC turning and milling, electromechanical assembly, integration halls, cabling, classified production areas, quality assurance and quality control, procurement and warehousing.

Aran Defense is engaged with both Israeli government entities and prominent international defense corporations, thereby providing Ondas access to an established manufacturing operation catering to the sector.

While the deal aims to reinforce Ondas' dedication to Israel's sovereign defense-industrial base and augment domestic engineering and manufacturing capacity for its autonomous defense systems, the announcement initially elicited a negative reaction from investors, causing Ondas shares to drop in premarket trading.