Electric aircraft start-up Archer to go public via $3.8bn merger with Atlas Crest

Archer, an electric aircraft start-up, has agreed to merge with Atlas Crest Investment, a special purpose acquisition company (SPAC), in a deal valued at around $3.8 billion.

The merger will enable Archer to become a publicly listed company that will trade on the New York Stock Exchange (NYSE) under the ticker symbol – ACHR.

Ken Moelis – Chairman of Atlas Crest Investment and Chairman and CEO of Moelis & Company said: “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.

“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 calls itself an urban air mobility (UAM) company, which is focused on developing all-electric vertical take-off and landing (eVTOL) aircraft.

According to Archer, its eVTOL aircraft can potentially travel distances of up to 60 miles at a speed of 150mph.

Electric aircraft start-up Archer signs $3.8bn merger deal with Atlas Crest Investment. Photo courtesy of Archer Aviation.

The merger is anticipated to offer around $1.1 billion of gross proceeds to the combined firm, assuming minimal redemptions, to fund expected growth in the future. These include a 100% committed $600 million common stock private investment in public equity (PIPE) at $10 per share.

The PIPE investors include United Airlines, Stellantis and the venture arm of Exor, Baron Capital Group, Mubadala Capital, the Federated Hermes Kaufmann Funds, Access Industries, and Putnam Investments.

Apart from that, Ken Moelis and affiliates alongside Marc Lore will invest $30 million in the PIPE.

Brett Adcock – Archer co-founder and co-CEO commented said: “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.”

The merger, which is subject to Atlas Crest Investment stockholders’ approval and customary closing conditions, is expected to be wrapped up in Q2 2021.

Parallelly, United Airlines has agreed to invest in Archer as part of its larger effort to partner with top technology firms that will decarbonize air travel.

As per the terms of the transaction, United Airlines has booked an order, subject to its business and operating needs, for $1 billion of Archer’s aircraft, with an option for an a further $500 million of aircraft.