Kratos Defense & Security Solutions announced a new 40,000‑square‑foot manufacturing plant in Birmingham, Alabama, bringing the total footprint of its Oxmoor Valley campus to roughly 150,000 square feet. The expansion adds state‑of‑the‑art production space that will house the company’s high‑altitude ISR system HORUS, the mobile bistatic radar platform CRADLE, and the UltraSpec non‑destructive inspection technology for advanced composite materials.
The new facility is a strategic response to growing demand for Kratos’ advanced defense technologies. HORUS provides high‑resolution imaging for intelligence, surveillance, and reconnaissance missions; CRADLE delivers mobile radar and communications capabilities for air and ground forces; and UltraSpec enables rapid, non‑destructive testing of composite structures used in aircraft and missile systems. By expanding capacity for these platforms, Kratos can accelerate delivery to existing customers and pursue new contracts in ISR, radar, and hypersonic markets.
Kratos acquired the Birmingham operations—formerly Southern Research Engineering—in May 2022 for $80 million, and the workforce there has doubled since the acquisition. The new plant signals confidence in the sustained demand that has driven recent contract wins, including roughly $30 million in Air Defense and C5ISR hardware contracts and a letter of intent for 60 Zeus hypersonic rocket motors. Senior Vice President Michael Johns said the company is “excited to continue our rapid expansion in the Birmingham area” and that the new facility will match the top talent the company is hiring.
The expansion has already generated a positive market reaction. On the day of the announcement, Kratos’ shares rose between 2.5% and 3.3%, reflecting investor enthusiasm for the increased production capacity and the company’s alignment with the broader defense‑spending environment. Analysts noted that the facility expansion, combined with recent contract wins and a rising price target from several research firms, underpinned the favorable reaction.
Kratos’ reinvestment‑first capital allocation philosophy is evident in this move. Rather than returning cash to shareholders, the company is channeling earnings into production infrastructure that supports its high‑margin ISR, radar, and composite inspection businesses. The expansion positions Kratos to capture growth in the ISR, radar, and hypersonic sectors, reinforcing its competitive edge and supporting the company’s long‑term growth trajectory.
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