- The merger implies a $638 million pro forma equity value and $370 million enterprise value for Space-Eyes
- The combined company will keep the Space-Eyes name and plans to trade on Nasdaq under the ticker CUAS
- The company’s CATE AI engine fuses radar, RF and satellite feeds into a single air picture
Geospatial intelligence and counter-drone company Space-Eyes will go public through a merger with McKinley Acquisition. Space-Eyes said it signed a definitive business combination agreement with McKinley, and that their respective boards gave unanimous approval.
The deal implies a pro forma equity value of $638 million for Space-Eyes and an enterprise value of $370 million. Those figures assume no shareholder redemptions from McKinley’s trust account and count the first $5 million of private investment. The combined company will keep the Space-Eyes name and expects to trade on Nasdaq under the ticker CUAS, pending exchange approval. The deal is expected to close in the fourth quarter, subject to shareholder and regulatory sign-off.
Eric Trump was named an investor and strategic adviser to the company. The release gives no figure for his investment or details on the advisory role.
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What Does Space-Eyes Build?
At the center of the Space-Eyes product line is CATE AI, a fusion engine that combines radar, radio frequency, electro-optical and infrared sensors, and satellite feeds into a single air picture.
Space-Eyes said the counter-drone systems built on it detect, track, identify and mitigate unauthorized aircraft at critical infrastructure sites, military installations, borders and large public venues. It added that the platform works with sensors customers already own, shortening procurement and fielding timelines.
The same engine drives products for maritime domain awareness, wildfire detection and counter-drone missions. Space-Eyes markets those as SeaWatch, FireWatch and MORPHEUS. The company expanded its Miami headquarters and opened a Washington, D.C., office in January, and said it is preparing an RF satellite constellation to widen coverage for those products.
How Is the Transaction Being Financed?
McKinley holds $176.7 million in trust. Alongside that, the parties sourced up to $75 million through a securities purchase agreement signed July 30.
That agreement calls for $5 million in senior secured convertible notes at an initial closing, triggered by the filing of a Form S-4 registration statement, with proceeds routed to a control account. Up to $70 million more in notes and warrants would follow at later closings. The notes carry an annual interest rate of 10 percent and mature in 2031. Warrants are exercisable at $12 per share.
At the subsequent closing, Space-Eyes must issue buyers shares equal to 9.9 percent of McKinley’s outstanding common stock after the merger. Unused shares return at maturity. The notes are secured by a first priority interest in substantially all assets of Space-Eyes and its subsidiaries.
Clear Street is the lead adviser and placement agent. Alexander Capital is a co-adviser and placement agent.
