Polyrizon Ltd. (NASDAQ:PLRZ) saw its stock climb about 2% in premarket trading Tuesday following disclosure of a non-binding memorandum of understanding to purchase a controlling interest in Arrow Aviation.
Under the terms outlined in the MOU, the Israel-based, pre-clinical-stage biotechnology company intends to acquire a 51% stake in Arrow Aviation through a cash infusion of approximately $5.8 million. The proposed transaction also contemplates the transfer of a Hawker 800 aircraft, which Polyrizon values at $3.5 million, to Arrow Aviation as part of the consideration, as well as the forgiveness of outstanding shareholder debts.
Polyrizon framed the move as a strategic diversification away from its core biotechnology activities and into the private aviation sector. In a statement included with the announcement, Tomer Izraeli, CEO of Polyrizon, said: "We believe that this strategic move, upon completion, represents an exciting diversification opportunity for Polyrizon, allowing us to leverage our strong financial position to enter the dynamic private aviation market."
Arrow Aviation operates a fleet of executive jets and provides private flight services for both business and leisure customers. The company also offers specialized services including medical evacuations, air rescues and cargo operations. According to figures disclosed in the announcement, Arrow Aviation currently produces annual unaudited revenues of approximately $19 million and adjusted EBITDA of about $3 million.
The MOU includes an option mechanism under which Polyrizon may acquire the remaining 49% of Arrow Aviation after a two-year period. A definitive agreement is expected to be executed within 30 days, but completion is conditioned on due diligence and customary closing conditions outlined in the MOU.
The announcement also referenced a market projection indicating the private aviation sector is expected to grow to $41.38 billion by 2030, a figure included in the company's disclosure about the proposed move.
Investors responded to the news with a modest uplift in Polyrizon's share price in premarket activity. The transaction, as presented, marks a material strategic shift for a company currently characterized as pre-clinical in the biotechnology space and illustrates an intent to broaden its business footprint into aviation-related services.