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Electric Aircraft Company Archer Merges with Atlas Crest SPAC

The transaction gives Archer an implied pro forma equity value of $3.8 billion at the $10-per-share private investment in public equity (PIPE) price.
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Archer, a developer of all-electric take-off and landing aircraft, Wednesday announced a merger with special purpose acquisition company Atlas Crest Investment ACIC.

Archer will be listed on the NYSE with the ticker symbol ACHR. Shares of Atlas Crest surged 36.7% to $15.35 on Wednesday morning.

The transaction gives the combined company an implied pro forma equity value of $3.8 billion at the $10.00 per share private investment in public equity (PIPE) price.

The combined company is expected to receive approximately $1.1 billion of gross proceeds. 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.

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The PIPE included participation from leading strategic and long-term financial investors including United Airlines  (UAL) - Get United Airlines Holdings Inc. Report, Stellantis, 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 former Walmart executive Marc Lore, are investing $30 million in the PIPE.

In other news for Archer on Wednesday, United announced an agreement to invest in Archer as part of the airline’s effort to partner with leading technology companies that will decarbonize air travel.

Under the agreement, United has placed an order 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.

Archer says its mission is to “advance the benefits of sustainable air mobility and become the leader in the new era of UAM [urban air mobility].”