, an Urban Air Mobility company and developer of all-electric vertical take-off and landing (“eVTOL”) aircraft, and Atlas Crest Investment Corp. , a special purpose acquisition company, have announced they have entered into a definitive agreement for a business combination that would result in Archer becoming a publicly listed company. It is anticipated that the post-closing company, Archer, will be listed on the NYSE with ticker symbol “ACHR.”
Based in Palo Alto and led by co-founders and co-CEOs Brett Adcock and Adam Goldstein, Archer’s mission is to advance the benefits of sustainable air mobility and become the leader in the new era of UAM, a $1 trillion plus market, according to leading industry research. Archer is developing the world’s first commercially viable all-electric UAM platform that will move people throughout the world’s cities in a fast, safe, sustainable, and cost-effective manner. The fully electric vertical takeoff and landing aircraft is expected to be capable of traveling distances of up to 60 miles at 150 mph using technology available today and will transform how people approach everyday life, work and adventure, while benefiting the environment and a future zero emissions world. This is particularly important as urban density continues to grow.
In further news, United Airlines today announced that it has entered into an agreement to invest in Archer as part of the airline’s broader effort to partner with leading technology companies that will decarbonize air travel. Under the terms of the agreement, United has placed an order, subject to United’s business and operating requirements, for $1 billion of Archer’s aircraft, with an option for an additional $500 million of aircraft. United, in partnership with Mesa Airlines, could give customers a quick, economic and low-emission way to get to airports within its major hubs by 2024.
“Part of how United will combat global warming is embracing emerging technologies that decarbonize air travel. By working with Archer, United is showing the aviation industry that now is the time to embrace cleaner, more efficient modes of transportation. With the right technology, we can curb the impact aircraft have on the planet, but we have to identify the next generation of companies who will make this a reality early and find ways to help them get off the ground,” said United CEO Scott Kirby. “Archer’s eVTOL design, manufacturing model and engineering expertise has the clear potential to change how people commute within major metropolitan cities all over the world.”
The collaboration agreement provides for close coordination between United Airlines and Archer in a commercialization approach which emphasizes existing technology and elegant design to facilitate regulatory approvals and efficient manufacturing culminating in a luxury experience at a scaled, low delivered cost point. United estimates that using one of Archer’s eVTOL aircraft could reduce CO2 emissions by up to 50% per passenger on a trip between Hollywood and Los Angeles International Airport (LAX), which is one of the initial cities Archer plans to launch their fleet and one of United’s largest hubs.
Archer’s highly accomplished team of top engineering and design talent, with a collective 200+ years of eVTOL experience, are driving this next transportation revolution. The full scale eVTOL aircraft is expected to be unveiled in 2021.
Archer originally launched with an initial investment from serial entrepreneur Marc Lore. Lore has remained a trusted advisor to the team and has played a pivotal role leading up to today’s announcement.
“Brett and Adam’s big vision for changing the future of transportation coupled with their passion, tenacity, and optimism made my decision to invest in Archer an easy one,” said Lore. “Today is a testament to the pair’s endless drive and I’m excited to be on this journey with them and our newly expanded team. Together, we’ll provide the capital needed to continue leading the Urban Air Mobility space.”
Brett Adcock, Archer’s co-founder and co-CEO commented,
“We’re thrilled to partner with Atlas Crest to help accelerate our goals of ushering in the next age of sustainable air mobility and enable human micro-exploration. By merging efforts with an industry innovator like Atlas Crest and one of the most successful entrepreneurs in finance, Ken Moelis, we’re confident Archer will transform consumer travel and everyday life.”
“We founded Archer to address the environmental and societal issues caused by road transportation and urban overloading,” said Archer co-founder and co-CEO Adam Goldstein. “Through our all-electric aircraft, we are striving to curb carbon emissions, decrease traffic, and create the transportation networks of the future. What started with a handshake deal from our lead investor and advisor Marc Lore, Archer’s latest funding and acquisition news brings this vision to life in a big way, enabling us to accelerate the future of sustainable travel at scale.”
“As we look towards the next era of sustainable travel and work, it’s important to invest in companies with a firm vision for change, without sacrificing efficiency or innovation,” said Ken Moelis, Chairman of Atlas Crest and Chairman and CEO of Moelis & Company. “We’re dedicated to partnering with disruptive, world-class companies undergoing transformational growth. Archer’s dedication to swift, sustainable mobility is coming to life and it’s a journey we’re thrilled to be a part of.”
“Archer will provide commuters and travelers the flexibility on a global basis to live farther, commute and adventure faster and transform urban mobility in a greener, zero emissions world,” said Michael Spellacy, CEO of Atlas Crest. “We were looking to merge with a purpose led company and Archer’s passion about the future of urban mobility and sustainable travel makes us excited to catalyze this new age of mobility.”
The business combination agreement comes on the heels of several leading strategic partnerships for Archer. In January 2021, Archer announced it had entered into a strategic collaboration agreement with Stellantis, with a focus on accessing its low-cost supply chain, advanced composite material capabilities, and engineering and design experience. “Unlocking the potential of new technologies like urban air mobility is a key enabler in creating a broad mobility ecosystem for consumers,” said Mike Manley, Head of Americas, Stellantis. “We are proud to deepen our relationship with Archer Aviation through this investment and we look forward to growing our partnership to accelerate a pathway to innovative, sustainable transportation.”
Transaction Overview
The transaction values the combined company at an implied $3.8 billion pro forma equity value at the $10.00 per share PIPE price. The combined company is expected to receive approximately $1.1 billion of gross proceeds from a fully committed common stock PIPE offering of $600 million, along with approximately $500 million cash held in trust, assuming minimal redemptions of Atlas Crest’s existing public stockholders. The PIPE included participation from leading strategic and long-term financial investors including United Airlines, Stellantis and the venture arm of Exor, Baron Capital Group, the Federated Hermes Kaufmann Funds, Mubadala Capital, Putnam Investments and Access Industries. Additionally Ken Moelis and affiliates, along with Marc Lore, are investing $30 million in the PIPE. Net cash from the transaction will be used to fund Archer’s development to commercialization and is expected to exceed the funding required to achieve cash flow positive. Archer’s existing shareholders will roll 100% of their shares into the combined company.
The boards of directors of both Archer and Atlas Crest have unanimously approved the proposed business combination, which is expected to be completed in the second quarter of 2021, subject to the approval by Atlas Crest stockholders and the satisfaction or waiver of other customary closing conditions identified in the business combination agreement.
Source: Press Release
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