Tessera Defense and Homeland Security Inc. said Oct. 15 it paid $1 million for a 90-day option to buy 51% of Israeli company RT LTA Systems Ltd., with the purchase subject to due diligence and approvals.
A Sept. 24 agreement gives Tessera’s wholly owned Israeli subsidiary the right to acquire all of X S.E. Security and Defense Ltd.’s shares in RT, equal to 51% of its fully diluted share capital. Tessera has not completed the acquisition and is still reviewing the target. Closing also depends on required approvals.
The contract sets RT’s equity value at the lower of $13 million or a formula using twice its average EBITDA plus 10% of its average revenue for fiscal years 2026 through 2028. The calculations will use audited financial statements. Since the purchase price covers 51% of that value, the $13 million cap would imply $6.63 million for the stake. That is not a fixed purchase price.
The $1 million option payment is credited toward the price only if Tessera exercises the option and the purchase is consummated. The agreement provides for a refund if it or the option terminates, or if the purchase is not completed within the option period, as extended, subject to specified exceptions. If Tessera exercises the option and the purchase closes, $2 million in total would be credited against the purchase price, including the $1 million option payment already made; Tessera would pay the remaining $1 million at closing. Any remaining amount would be paid in installments tied to RT’s audited financial statements.
Within 60 days of Sept. 24, RT is to grant a non-exclusive, perpetual technology license to Tessera Defense and Homeland Security Israel Ltd., Tessera’s wholly owned Israeli subsidiary. The licensing obligation applies whether or not the acquisition proceeds.
Tessera describes Skystar and SkyGuard as tethered, helium-filled aerostat platforms that can carry cameras, infrared sensors, radar and communications equipment. CEO Michael Oster said the systems could let the company monitor borders and critical infrastructure from the air for extended periods, adding an airborne layer to its security platform.
Tessera said possible funding sources include the expanded Mandragola credit facility, its at-the-market share offering program or other sources. An Oct. 5 filing with the U.S. Securities and Exchange Commission described a new revolving line of up to $5 million, alongside an existing $2 million line. The new line carries 12% simple annual interest, allows advances to convert into Tessera shares and had not been drawn as of the filing. The company said issuing additional equity could dilute existing shareholders.
Tessera said it is checking RT’s stated backlog and project pipeline. Tessera said it was checking RT’s assertions that it had about $15 million in backlog as of Oct. 15, including an active multimillion-dollar UAE border-protection contract. The option period runs 90 days from Sept. 24, subject to the agreement’s extension terms. Tessera’s next step is to decide whether to exercise after its review; any purchase would still require approvals.
