...public offering of Kratos common stock, raising $100 million in gross proceeds at $5.00 per share. Kratos also announced that the Kratos common stock portion of the Composite Engineering, Inc. (CEI) acquisition consideration of $20 million will also be valued at $5.00 per Kratos share, consistent with the offering price of the just closed public offering. The Company expects to use the net proceeds from this offering to fund a portion of the cash consideration payable to the stockholders of Composite Engineering, Inc. (CEI) in connection with the proposed acquisition of CEI. To the extent that the net proceeds are not applied to the CEI acquisition, the Company intends to use them for general corporate purposes.

Eric DeMarco, Kratos' President and CEO, said, "We announced the completion of a public offering of Kratos' common stock, with a significant amount of the newly issued shares being placed with existing long term Kratos shareholders. A linchpin to the successful execution of this transaction was Oak Investment Partners' $55 million investment, and I want to personally thank fellow member of the Kratos Board of Directors and Oak Managing Partner, Bandel Carano, for his confidence in Kratos' strategic business plan and our management team." Mr. DeMarco continued, "With the closing of this equity raise, and the expected closing of the pending acquisition of CEI in the third quarter, we will have acquired a very unique and rare business in the growing Aerial Targets and Unmanned Aerial Drone market place, and we will have positioned Kratos for accelerated delevering going forward and increased Kratos' expected Free Cash Flow generation for the future."