BT Brands shifts focus to drones after merger with Aero Velocity

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BT Brands, parent company of several restaurant concepts including Burger Time, has announced a definitive merger agreement with Cincinnati-based drone technology company Aero Velocity in an all-stock deal. The deal is expected to close in late 2025 or early 2026.

As part of the agreement, Aero Velocity will continue as a wholly-owned subsidiary of BT Brands, and the transaction includes an equity investment in the combined company of no less than $3 million and up to $5 million by Aero Velocity shareholders. Aero Velocity’s stockholders are expected to own approximately 89% of the combined company, and existing BT Brands stockholders are expected to own approximately 11%, subject to adjustment based on BT Brands’ net cash at the closing.

The combined company will focus on developing advanced drone technologies and provide AI-powered solutions for government and commercial applications. Aero Velocity is also developing a contract drone manufacturing business to expand its portfolio.

“BT Brands considered a range of strategic initiatives, and we believe this proposed transaction represents an opportunity to deliver significant value to our stockholders,” BT Brands chief executive officer Gary Copperud said in a statement. “Aero Velocity is well positioned in the rapidly growing drone services market providing incredible value to its government agency and commercial clients.”

This merger represents a significant shift for BT Brands, which was founded in 1987 after opening its first Burger Time restaurant in North Dakota. The company grew its footprint in North Dakota, South Dakota, and Minnesota, and went public in 2021. It then acquired several concepts, including Pie in the Sky, Village Bier Garten, Schnitzel Haus, and Keegan’s Seafood Grille. In 2022, BT Brands also acquired a 40% stake in Bagger Dave’s Burger Tavern, a Michigan-based full-service chain, which it then sold earlier this year following a strategic review.

In August, BT Brands reported that it was considering potential mergers beyond the foodservice sector after struggling through several quarters of net losses. At the time, Copperud said the company’s objective is “to create shareholder value by identifying opportunities that strengthen our platform and broaden our growth prospects.”

The global drone market is estimated to grow at a compound annual rate of 14.3% by 2030, according to Grand View Research. The BT Brands and Aero Velocity merger was unanimously approved by the board of directors of both companies

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Contact Alicia Kelso at [email protected]

 

 

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