Mach Industries just spent $50M to solve a major defense tech problem | TechCrunch

Mach Industries, a Huntington Beach defense startup, acquired solid rocket motor startup Exquadrum in a $50 million cash-and-equity deal. Exquadrum has been fully folded into Mach’s operations and rebranded as Mach Energetics, giving direct control over a critical component for modern unmanned systems. The acquisition followed initial customer-driven introductions after a Mach recruiter mentioned a need for a solid rocket motor supplier. Mach became a customer and then acquired the company about five months later, beating out more than eight other potential buyers. The move supports vertical integration across solid rocket motors, engines, radar, and avionics to lower cost and address constrained supply. Domestic solid rocket motor capacity is limited, with the market largely controlled by Aerojet Rocketdyne and Northrop Grumman, while demand from drone warfare continues to grow.

"Mach Industries, a Huntington Beach-based defense startup, has acquired solid rocket motor startup Exquadrum in a $50 million cash-and-equity deal, the company tells TechCrunch. Exquadrum - now rebranded as Mach Energetics - has been fully folded into Mach's operations, giving it direct control over one of the most important, and constrained, components in modern unmanned systems."

"The deal itself started with a lucky break. The two companies first connected last September when an Exquadrum customer at an MIT recruiting event happened to overhear a Mach recruiter mention that the company was in the market for a solid rocket motor supplier. Introductions were made, Mach came in as a customer, and now, roughly five months later, it has acquired the company outright, beating out upwards of eight other potential buyers in the process, it says."

"“As we deliver vehicles to the warfighter, we'll continue to vertically integrate our supply chain across solid rocket motors, engines, radar, and avionics to ensure we deliver the best possible product at the lowest cost. In many areas of the defense industrial base, these components are not only too expensive or lacking performance, they're simply unavailable, with lead times stretching years. In short, vertical integration is non-optional.”"

"That supply problem is real and getting more acute. Decades of consolidation have left the domestic solid rocket motor market effectively controlled by two large primes - Aerojet Rocketdyne and Northrop Grumman - with little independent capacity to absorb the growing demand that modern drone warfare has created. Indeed, in February, the Pentagon awarded the defense tech outfit Anduril $43.7 million specifically to expand domestic SRM production (its second such investment in the company in just over a year)"

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