U.S. Defense Tech Firm Red Cat Wants to Buy Steyr Motors for About €205 Million

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The U.S. drone maker Red Cat Holdings wants to take over the Austrian specialty engine builder Steyr Motors and is offering €39 per share in cash.

Red Cat Holdings (Nasdaq: RCAT) is launching a voluntary public takeover offer for all shares of Steyr Motors AG, the company said in a press release. The offer price is 28.9 percent above last Friday’s closing price and 55.8 percent above the 52-week low. Steyr’s anchor shareholder, the B&C Group, has irrevocably committed to tender its shares, and Steyr’s chief executive, Julian Cassutti, intends to tender his own shares as well.

The Buyer: Red Cat Holdings

Red Cat is based in Salt Lake City and builds drones and robotic systems for defense and national security, including the Black Widow reconnaissance drone. Revenue is growing fast, but so are the losses: sales have recently risen by several hundred to more than a thousand percent year over year, starting from a very small base, and margins are thin. In the spring Red Cat raised about $225 million through a share offering. According to the press release, the Steyr offer is "fully financed." Evercore is advising Red Cat on the financial side and Freshfields on the legal side.

The maritime unit Blue Ops is the strategic link. It plans to build more than 1,000 unmanned surface vessels in 2027, and according to NuWays Research, Steyr Motors is one of two engine suppliers for the V7, currently its only model. Whoever owns the propulsion controls a key part of the supply chain.

The Valuation: What Steyr Motors Would Cost

Steyr Motors has 5,251,261 shares, after its share capital was raised in the spring to pay for the acquisition of the Danish maker BUKH. That allows a straightforward calculation of the deal value:

Red Cat is paying shareholders more than €46 million above what the market valued the company at last Friday. For comparison, the placement price at the 2024 stock market debut was €14, which valued the company at about €74 million. The offer price is almost three times that. In the spring of last year, Mutares sold 910,000 shares for €30.9 million, or about €34 per share, and later sold the rest of its stake. On current figures the valuation looks rich, since adjusted EBIT in the first half of 2026 was only €0.1 million. It looks cheaper against expectations for 2027 and 2028 and an order backlog of €310 million. The estimates come from NuWays, an analyst firm commissioned by Steyr.

The Eventful History of Steyr Motors

The roots go back a long way. The monoblock engine family, the technical heart of the company, traces back to developments at Steyr-Daimler-Puch in the 1920s. In 1990 the engine business was spun out of the traditional industrial group. It then changed hands several times: a former head of the Austrian state holding company ÖIAG, a Chinese consortium and finally the French group Thales. Steyr Motors went insolvent at the end of 2018, and in 2019 Thales, long one of its biggest customers (for the Australian Hawkei vehicle, among others), took it over.

In 2022 Thales sold it to the Munich private equity firm Mutares, reportedly for a symbolic purchase price. Under Mr. Cassutti came a swift turnaround and, in the fall of 2024, a listing in the Scale segment of the Frankfurt Stock Exchange, followed later by a listing in Vienna. B&C joined as an anchor investor. In 2025 the stock climbed steeply, framework agreements with Rheinmetall and later KNDS (at least 500 auxiliary power units for the Leopard 2 through 2034) filled the order books, and Mutares sold its last 23 percent. Today about 85 percent of the shares are in free float, and B&C holds roughly 15 percent.

2026 began with the first dividend in the company’s history (€0.25 per share), the acquisition of the Danish boat engine maker BUKH and a joint venture in China with €65 million in guaranteed sales over five years. Then came the setback: delayed call-offs on large defense projects slowed the first half, net income fell to a loss of €1.2 million, the 2026 revenue guidance was cut from a range of €75 million to €95 million to a range of €56 million to €61 million, and the medium-term targets for 2027 (about €140 million in revenue and about €40 million in EBIT) were withdrawn. The stock fell to its low for the year. Red Cat had already made a nonbinding offer in the summer and withdrew it. Now it is back, this time with a price and the backing of the anchor shareholder.

The Competition

In engines, NuWays names Cummins, Iveco, Caterpillar and Deutz as groups that could push harder into Steyr’s niche. In power generators, Steyr’s M12 Power Unit competes with Caterpillar, Cummins and MTU. Steyr’s selling point is high power density at low weight, often as the sole supplier on platforms that run for decades. In drones, Red Cat operates among U.S. players such as AeroVironment and Skydio, which compete for the same Pentagon programs.

Two Views of the Offer

In favor, Steyr’s management and supervisory board point to international expansion, capital and access to customers. The supervisory board views the transaction positively, subject to a review of the offer document. Red Cat promises to keep the workforce, manufacturing and research and development in Steyr and to examine the site as an anchor for its European business. For shareholders, the cash price offers an immediate exit after the summer’s share price slide.

On the other side, the analysts at NuWays, who still rate the stock a buy after the profit warning, calculate a fair value of €49 per share, about a fifth more than the offer. In their view growth has been delayed but not canceled, because no orders have been lost. For 2027 they point to a five-year Spanish contract for 1,000 vehicles, an Austrian tender for 800 vehicles and the unmanned vessel business. On the buyer’s side is a company that is losing money and carries a high valuation in the capital markets. Regulators in Austria, Italy, Australia and the United Kingdom must also approve the deal, which shows how sensitive a defense supply chain is to a change of ownership.

What Happens Next

The full offer document is due to appear on ir.redcatholdings.com, and the acceptance period is expected to run until mid-December. The offer succeeds only if Red Cat holds at least 50 percent plus one share at the end, which works out to about 2.63 million shares. The shares committed by B&C (about 0.79 million) cover roughly a third of that, so a majority of the remaining shareholders still has to be won over. Steyr is due to report third-quarter results this week, according to its financial calendar, which may give shareholders additional information for their decision.