Filing Flows › Kratos Defense & Security Solutions (KTOS) › Takeover & LBO
Is Kratos Defense & Security Solutions (KTOS) a takeover target?
A leveraged buyout at today's price plus 30% ($53.42 a share) would return a loss of about 2% a year to a private-equity buyer over 5 years; no price, however low, gets a buyer to 20%. Historically 4.7% of companies with its figures were bought within a year (0.94× the average).
The buyout, step by step
| Entry | Amount | How |
|---|---|---|
| Offer price a share | $53.42 | today's $41.09 plus 30% |
| × shares | 188.8 million | |
| = Equity value | $10.1B | |
| + Debt refinanced | $0 | |
| − Cash | $1.4B | |
| = Enterprise value | $8.7B | 104.2× EBITDA of $83.3M |
| Fees | $174M | 2% of the price |
| New debt | $458M | 5.5× EBITDA at 7.65% a year; the limit that binds: 5.5× EBITDA |
| Buyer's own money | $8.4B | 95% of the cost |
5 years under the buyer
| Year | Revenue | EBITDA | Interest | Free cash flow | Debt left |
|---|---|---|---|---|---|
| Year 1 | $1.8B | $90.0M | $35.0M | −$57.1M | $515M |
| Year 2 | $1.9B | $96.0M | $39.4M | −$60.9M | $576M |
| Year 3 | $2.0B | $101M | $44.1M | −$64.5M | $641M |
| Year 4 | $2.1B | $106M | $49.0M | −$67.9M | $709M |
| Year 5 | $2.2B | $109M | $54.2M | −$71.2M | $780M |
The exit and the buyer's return
| Exit | Amount | |
|---|---|---|
| Exit multiple | 76.3× EBITDA | today's trading multiple, before any premium |
| Enterprise value at exit | $8.3B | |
| − Debt left | $780M | |
| = Buyer's equity | $7.5B | |
| Money multiple | 0.90× | on $8.4B put in |
| Buyer's yearly return (IRR) | −2.2% |
Price against return
What the buyer makes at other premiums over today's $41.09.
| Premium | Price a share | Buyer's IRR |
|---|---|---|
| 10% | $45.20 | 2.0% |
| 20% | $49.31 | −0.2% |
| 30% | $53.42 | −2.2% |
| 40% | $57.53 | −3.9% |
| 50% | $61.64 | −5.5% |
The figures used
| Figure | Amount | |
|---|---|---|
| Revenue, last 12 months | $1.6B | |
| EBITDA, last 12 months | $83.3M | 5.1% of revenue |
| Depreciation and amortization | $76.9M | |
| Capital spending | $91.5M | |
| Debt | $0 | |
| Cash | $1.4B | |
| Share price | $41.09 | on Oct 30, 2026 |
Fixed rules, the same as the interactive view's starting point: the shares are bought at today's price plus 30%, the company's debt is refinanced and fees take 2%. New debt is the least of 5.5× EBITDA, 65% of the price and the amount whose interest EBITDA covers 2 times, at 7.65% a year (SOFR 3.89% plus the high-yield B spread 3.26% plus 0.5%, rates of Oct 15, 2026). Revenue grows 8.0% in the first year — the company's own rate, held between −3% and +8% — fading to 3% by year 5; the EBITDA margin, depreciation and capital spending stay at today's share of revenue; working capital takes 10% of each year's added revenue; tax is 30% of profit after interest. Every dollar of free cash flow repays debt. After 5 years the buyer sells at today's multiple of EBITDA.
What a takeover could cost
Takeovers in its sector paid a median premium of 40% over the share price before the deal (the middle half 14.7% to 60.2%), according to the 20 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Kratos Defense & Security Solutions would cost about $57.53 a share, $10.9B for all its shares.
| Premium | % | Price a share | All shares |
|---|---|---|---|
| Low end (a quarter of deals paid less) | 14.7% | $47.13 | $8.9B |
| Median | 40% | $57.53 | $10.9B |
| High end (a quarter paid more) | 60.2% | $65.83 | $12.4B |
The odds, from history
Historically 4.7% of companies with its figures were bought within a year (0.94× the average). Its figures put it in decile 5 of 10 (10 = the most likely to be bought). The odds come from a model of every merger proxy, tender-offer response and going-private statement filed on EDGAR since 2011, set against each company's size, margins, debt, cash flow and growth the year before.
Kratos Defense & Security Solutions' latest quarter
Kratos Defense & Security Solutions, Q3 2026: revenue $472M (+36% year over year), operating margin -1.0%, net loss $200K, operating cash flow −$5.2M. The chart follows the revenue to costs, profit and cash.
Questions
Is Kratos Defense & Security Solutions being acquired?
No headline, 8-K or 13D about a sale is on file in the last year.
Could private equity buy Kratos Defense & Security Solutions?
A leveraged buyout at today's price plus 30% ($53.42 a share) would return a loss of about 2% a year to a private-equity buyer over 5 years; no price, however low, gets a buyer to 20%.
What would a takeover of Kratos Defense & Security Solutions cost?
Takeovers in its sector paid a median premium of 40% over the share price before the deal (the middle half 14.7% to 60.2%), according to the 20 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Kratos Defense & Security Solutions would cost about $57.53 a share, $10.9B for all its shares.
Updated Nov 8, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.