Nukkleus, Inc. Achieves Strategic Milestone with Acquisition of a Controlling Stake in Star 26 a Defense-focus acquisition company and a provider of Israel's Iron Dome Missile Defense System

Rhea-AI Summary

Nukkleus (NASDAQ: NUKK) has acquired a 51% controlling stake in Star 26 Capital Inc. for $26 million, marking a strategic shift from fintech to defense. Star 26 owns 95% of RIMON, a key supplier of components for Israel's Iron Dome missile defense system. The transaction, completed on December 15, 2024, includes cash, promissory notes, common stock, and stock warrants, with an option to acquire the remaining equity later.

RIMON operates two main business lines: distribution of generators, masts, and lighting solutions through exclusive distributorship agreements, and development of tactical vehicles for defense forces. Under new CEO Manny Shalom, Nukkleus aims to capitalize on the growing defense sector, citing increased investments in Israeli defense firms amid geopolitical tensions. The company plans to expand into merchant banking activities across banking, U.S. real estate, and technology-focused coworking spaces.

Positive

• Strategic acquisition of 51% stake in Star 26 Capital for $26 million, gaining control of RIMON's defense operations
• Access to Iron Dome missile defense system component manufacturing
• Exclusive distributorship agreements with leading suppliers
• Option to acquire remaining equity in Star 26
• Entry into rapidly growing defense sector amid increased regional investments

Negative

• Significant shift from core fintech/crypto business model introduces execution risk
• Substantial capital deployment of $26 million may impact financial flexibility
• Potential integration challenges merging fintech and defense operations

JERSEY CITY, NJ, Dec. 17, 2024 /PRNewswire/ -- Dec 17, 2024 - Nukkleus, Inc. (NASDAQ: NUKK), a pioneer in the fintech sector traditionally focused on the cryptocurrency market, announced that it has successfully acquired a 51% controlling stake in Star 26 Capital Inc., a defense acquisition company holding 95% ownership in RIMON. RIMON is a leading Israeli supplier of critical components for the Iron Dome missile defense system, as well as other defense and tactical solutions.

The transaction, finalized on December 15, 2024, involved a total purchase price of $26 million, including cash, a promissory note Nukkleus's common stock, and warrants to purchase additional shares of common stock of Nukkleus. This acquisition also includes an option agreement allowing Nukkleus to acquire the remaining equity in Star 26 at a later date.

With this acquisition, Nukkleus gains control over RIMON's diversified operations, which include two key business lines:

Distribution of Generators, masts and Lighting Solutions: RIMON operates through exclusive distributorship agreements with leading suppliers.

Development of Tactical Vehicles: RIMON designs, engineers, and integrates tactical vehicles, including reconnaissance vehicles, mobile command and control units, and satellite broadcast platforms, serving special defense forces, intelligence agencies, and the Israeli Defense Forces (IDF).

Manny Shalom, the newly appointed CEO of Nukkleus and a seasoned entrepreneur in the security sector, stated "This merger positions Nukkleus at the forefront of a booming defense industry. Our acquisition of Star 26 and RIMON aligns with our strategic pivot to capitalize on opportunities in the defense sector, which has seen rapid growth due to geopolitical shifts in the Middle East and the war in Ukraine. This has resulted in a surge of investments and acquisitions in Israeli defense firms such as PARAGON and PROTEGO, alongside a 120% increase in Israel's defense indices and a 38% rise in similar indices in the US."

He added "RIMON's expertise in critical defense systems, coupled with its established partnerships with leading defense exporters like Rafael and Elbit Systems, strengthens Nukkleus's capabilities in delivering innovative defense solutions."

As part of its expansion strategy, Nukkleus plans to integrate Star 26 operations into its business structure while exploring further growth opportunities. The company will also plans to broaden its activities into other sectors, serving as a Merchant Bank for companies in banking, U.S. real estate, and technology-populated coworking space campus locations, leveraging its financial expertise to seize emerging opportunities in the changing region of the middle east.

Looking Ahead

The combined entity will focus on the Israeli and US market opportunities – acquiring controlling interest in medium-sized companies while providing them financing and global business development opportunities. With a shared commitment to innovation and excellence, Nukkleus and Star are poised to drive growth and deliver value to shareholders, customers, and stakeholders alike.

Forward-Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties, including statements regarding the anticipated benefits of the acquisition, expected market trends, and future performance. Actual results may differ materially due to various factors. For a detailed discussion of these risks, please refer to Nukkleus's filings with the Securities and Exchange Commission (SEC).

Contact:

Yair Ohayon
CMO
l@nukk.com

 

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SOURCE Nukkleus, Inc.

FAQ

What is the value of Nukkleus's acquisition of Star 26 Capital (NUKK)?

Nukkleus acquired a 51% controlling stake in Star 26 Capital for $26 million, through a combination of cash, promissory notes, common stock, and stock warrants.

What percentage of RIMON does Star 26 Capital own?

Star 26 Capital owns 95% of RIMON, an Israeli supplier of critical components for the Iron Dome missile defense system.

What are RIMON's main business lines after the NUKK acquisition?

RIMON operates two main business lines: distribution of generators, masts, and lighting solutions, and development of tactical vehicles for defense forces.

How does the Star 26 acquisition change Nukkleus's business focus?

The acquisition marks Nukkleus's strategic pivot from fintech and cryptocurrency to the defense sector, with plans to expand into merchant banking activities.

What future expansion plans does NUKK have following the Star 26 acquisition?

Nukkleus plans to expand into merchant banking activities across banking, U.S. real estate, and technology-focused coworking spaces, while exploring additional growth opportunities in the defense sector.