Kratos Defense & Security Solutions announced the pricing of an underwritten public offering of common stock that sent its shares lower in trading. The company set the offering price at $84.00 per share for 14,285,714 shares, and the news coincided with a roughly 7% decline in the stock on Friday. The shares had closed at $92.14 on Thursday.
The $84.00 price point represents a discount to the most recent closing price, a structure that typically exerts downward pressure on existing holders because of dilution. In connection with the offering, Kratos granted the underwriters a 30-day option to purchase up to an additional 2,142,857 shares, which, if exercised, would increase the total number of shares sold.
After underwriting discounts and commissions, Kratos expects net proceeds from the offering to be approximately $1.17 billion. The company said the offering is expected to close on March 2, 2026, but that the closing remains subject to customary conditions.
Management outlined how the company intends to deploy the proceeds. A portion will finance capital expenditures aimed at scaling operations to meet rising demand from the Department of War and from national security customers. Additional funding will support development work on new products, systems and software, including national security systems.
Kratos also stated that it plans to use proceeds to strengthen its balance sheet so it can respond to anticipated contract awards from its pipeline of opportunities. The company indicated the funds will be applied to finance the recent acquisition of Nomad, to fund the pending acquisition of Orbit, and to support select future strategic mergers and acquisitions, in addition to general corporate purposes.
Market reaction and mechanics
The immediate market reaction - a single-session decline of about 7% following the pricing - reflects investor sensitivity to offerings priced below the prior close and to potential dilution from both the base offering and the underwriter over-allotment option. The stated net-proceeds estimate of about $1.17 billion is presented after customary underwriting discounts and commissions.
Timing
The offering is slated to close on March 2, 2026, contingent on customary closing conditions, meaning the transaction remains subject to those closing mechanics until it is finalized.
This article presents the company-disclosed details of the offering, the intended use of proceeds, and the immediate market response.