The Aerospace controls design and manufacturer found a good deal in SureFly

TransportUP reported in December that Workhorse’s SureFly Octocopter was planned to be purchased by Moog, Inc, a Torrance, CA based aerospace controls manufacturer.

Following the sale and Workhorse’s filing of a 8-K/A report with the SEC that disclosed the price paid by Moog for SureFly, the story has changed somewhat. Approximately $4 million was paid for the sale of SureFly, seemingly a good deal for Moog, Inc. Original estimates for the sale were pegged to $30-million plus, but other compensation or agreements that might not be public information may have aided Moog in closing their deal at such an attractive price.

The other portion of the deal is HorseFly – a last-mile delivery UAS that Workhorse has split 50/50 with Moog. HorseFly’s IP may be valuable enough to Moog (considering the outward facing publicity of said hardware focused on the hardware itself, not the drone) that the smaller sum paid for SureFly was more palatable a transaction for Workhorse after all.

In many instances, the intellectual property and systems integration of last-mile delivery services are commonly cited as the value-add tech in these scenarios – the physical drone could easily be replaced for less than $1,000 with an off-the-shelf model (albeit some modifications required).

Why it’s important: Investors initially reacted very energetically to the deal between Workhorse and Moog – the $30MM valuation of Workhorse’ SureFly technology was large enough to turn many heads, especially in an industry such as aerial mobility, where funding is not as readily attainable as other industries with lower capital requirements and start up costs.