Archer has revised the valuation of its previously announced business merger with Atlas Crest Investment Corp by 38 per cent – knocking $1 billion off its pro forma enterprise value, which now stands at $1.7 billion.
In a press release, it was announced this decision was made in recognition of Archer’s commitment to driving long-term value creation for all shareholders.
The combined company is still 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 no redemptions of Atlas Crest’s existing public stockholders.
It is anticipated that the post-closing company, Archer, will be listed on the NYSE with ticker symbol ‘ACHR’.
Brett Adcock, Archer co-founder and co-CEO., said: “We are focused on building not just an electric aircraft, but a sustainable, enduring eVTOL ecosystem, and having tremendous investor support and momentum is critical to our near- and long-term success.
“Today’s announcement reflects our commitment to transparency and shareholder alignment now and into the future. We are making this bold move to ensure our eVTOL market leadership.”
Archer co-founder and co-CEO Adam Goldstein, added: “Archer’s commercial partnerships and unparalleled talent set us apart from any other company in the eVTOL space, with an aircraft that has a streamlined path to certification paving the way for us to be first to market.
“We believe these qualities and our meaningful recent business progress, combined with an adjusted valuation, support a highly compelling investment thesis on an absolute and relative basis.”
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 early investor Marc Lore and founders Adcock and Goldstein, are investing $30 million in the PIPE. Net cash from the transaction will be used to fund Archer’s development to commercialisation and is expected to exceed the funding required to achieve cash flow positive. Archer’s existing shareholders will roll 100 per cent of their shares into the combined company.
Michael Spellacy, CEO of Atlas Crest, said: “Atlas Crest believes this is a unique opportunity to reset the valuation for the business, reflecting our commitment to ensuring long-term alignment between the company and its shareholders. We believe that Archer is the leading eVTOL in the space with considerable competitive advantages and enormous upside opportunity at this unparalleled entry point.”
As well as its revised valuation, Archer has also confirmed the appointment of Oscar Munoz, the former United Airlines Chairman and CEO, to the company’s board.
Munoz is a seasoned aviation executive and was CEO of United Airlines from 2015 to 2020. Prior to this, he served on the board of United Airlines’ parent company United Continental Holdings.
Commenting on his new role, Munoz said: “After a career focused on advancing the aviation industry, I am thrilled to be joining Archer’s board to contribute to the next true age of aerial mobility. Every new invention of transport inaugurates a revolution in how we live and thrive as a planet, from the birth of the automobile knitting our nation together, to the jet age keeping our world connected.
“In pioneering eVTOL aircraft, Archer is lifting us into the next age of true aerial mobility, changing the landscape of cities forever. Above all, as we take to the skies as a matter of routine, it will elevate our collective consciousness to the imperative of sustainability, which Archer’s technology will powerfully support.
“I am deeply proud to join the board of a company that is advancing the frontiers of aviation and expanding the horizons of how we live together.”
This year has been one of sustained momentum for Archer. In February, the company announced a strategic partnership with Stellantis to enable Archer to benefit from access to FCA’s low-cost supply chain, advanced composite material capabilities, and engineering and design experience.
It also announced a definitive agreement with United Airlines, the first of its kind for an eVTOL company, for $1 billion of Archer’s aircraft, with an option for an additional $500 million of aircraft. Archer also announced two city partnerships in Los Angeles and Miami, both of which will help those cities work to address some of the most pressing mobility and environmental challenges.
Last month, Archer unveiled its inaugural demonstrator aircraft, Maker, live in Los Angeles and worldwide to livestream audiences, amassing more than 38 million views to date.
The company also continues to bolster its highly experienced team with over 100 new hires in four months and notable new senior leadership appointments across Flight Safety, Certification, Engineering, Program Management and Manufacturing.
The company recently announced Jeff Greenwood as Chief Flight Test Pilot and Head of Flight Safety, Dave Dennison as Vice President of Engineering, Bob Ellithorpe as Vice President of Program Management and Glen Burks as Vice President of Manufacturing.