- New transaction terms adjust Archer’s pro forma enterprise
value from $2.7 billion to $1.7 billion
- Terms establish a more attractive entry point to market, and a
highly compelling investment thesis on an absolute and relative
basis
- Boards of Directors of both Archer and Atlas Crest reaffirm
recommendation of the deal
- Oscar Munoz, Former United Airlines Chairman and CEO, joining
the Archer Board reinforces Archer’s leadership in the Urban Air
Mobility space
Archer, a leading Urban Air Mobility (“UAM”) company and
developer of all-electric vertical take-off and landing (“eVTOL”)
aircraft, and Atlas Crest Investment Corp. (“Atlas Crest”) (NYSE:
ACIC), a special purpose acquisition company, today announced they
have revised the valuation of their previously announced
transaction. This strategic decision was made in recognition of
Archer’s commitment to driving long-term value creation for all
shareholders.
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“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,” said Brett Adcock, Archer co-founder and
co-CEO. “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’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,” said Archer co-founder and co-CEO Adam
Goldstein. “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.”
“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,” said
Michael Spellacy, CEO of Atlas Crest. “We believe that Archer is
the leading eVTOL in the space with considerable competitive
advantages and enormous upside opportunity at this unparalleled
entry point.”
Transaction Details
The new transaction terms adjust the pro forma enterprise value
of Archer from $2.7 billion to $1.7 billion, a 38% reduction. As
previously stated, 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 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."
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 Brett Adcock and Adam
Goldstein, 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 had
previously unanimously approved the proposed business combination
and reaffirm their commitment to the transaction.
Board Appointment and Business Momentum
In further news today, Archer is announcing the appointment of
Oscar Munoz, former United Airlines Chairman and CEO, to the
company’s board. Munoz, a seasoned aviation executive, served as
CEO of United Airlines from 2015 to 2020 and, prior to this, served
on the board of United Airlines’ parent company United Continental
Holdings. “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,” said Munoz. “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.”
2021 has been a year of sustained momentum at 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 over 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.
Update on Wisk Litigation
The United States District Court of Northern California ruled
last week in Archer’s favor denying a preliminary injunction motion
brought by Wisk. Further, a comprehensive forensics investigation
has concluded that not a single confidential Wisk document exists
on Archer’s systems. Archer will continue to aggressively defend
itself against this litigation and will also pursue counterclaims
against Wisk.
Additional information about the proposed transaction can be
found with the Securities and Exchange Commission and available at
www.sec.gov.
Advisors
Moelis & Company LLC is serving as exclusive placement agent
on the PIPE. Barclays Capital Inc. is serving as exclusive
financial and capital markets advisor to Archer. Moelis &
Company LLC is serving as exclusive financial advisor to Atlas
Crest. Cantor Fitzgerald & Co. is serving as exclusive capital
markets advisor to Atlas Crest. Duff & Phelps, LLC has provided
a fairness opinion in connection with the transaction to the Atlas
Crest board of directors. Cooley LLP is serving as legal advisor to
Archer. Kirkland & Ellis LLP is serving as legal advisor to
Atlas Crest.
About Archer
Archer’s mission is to advance the benefits of sustainable air
mobility. Archer is creating the world’s first electric airline
that moves people throughout the world's cities in a quick, safe,
sustainable, and cost effective manner. As the world’s only
vertically integrated airline company, Archer is designing and
developing electric vertical takeoff and landing (eVTOL) aircraft
for use in Urban Air Mobility that can carry passengers for 60
miles at speeds of up to 150 mph while producing minimal noise.
Archer's team is based in Palo Alto, CA. To learn more, visit
www.archer.com
About Atlas Crest
Atlas Crest Investment Corp. (NYSE: ACIC) is a special purpose
acquisition company formed for the purpose of effecting a merger,
stock purchase or similar business combination with one or more
businesses and is sponsored by an affiliate of Moelis &
Company, a leading global financial advisor to corporate
executives, boards, entrepreneurs, financial sponsors and
governments. The management team is led by Ken Moelis, Chairman,
and Michael Spellacy, Chief Executive Officer, both of whom have
had careers centered around identifying, evaluating and
implementing organic and inorganic transformational growth and
value creation initiatives across a broad range of industries.
Atlas Crest priced its $500 million initial public offering on
October 27, 2020.
Forward Looking Statements
Certain statements made in this press release are not historical
facts but are forward-looking statements for purposes of the safe
harbor provisions under The Private Securities Litigation Reform
Act of 1995. Forward-looking statements generally are accompanied
by words such as “believe,” “may,” “will,” “estimate,” “continue,”
“anticipate,” “intend,” “expect,” “should,” “would,” “plan,”
“predict,” “potential,” “seem,” “seek,” “future,” “outlook,” and
similar expressions that predict or indicate future events or
trends or that are not statements of historical matters. These
forward-looking statements include, but are not limited to,
statements regarding future events, the Business Combination
between Atlas and Archer, the estimated or anticipated future
results and benefits of the combined company following the Business
Combination, including the likelihood and ability of the parties to
successfully consummate the Business Combination, future
opportunities for the combined company, and other statements that
are not historical facts. These statements are based on the current
expectations of the management of Atlas and Archer and are not
predictions of actual performance. These forward-looking statements
are provided for illustrative purposes only and are not intended to
serve as, and must not be relied on, by any investor as a
guarantee, an assurance, a prediction or a definitive statement of
fact or probability. Actual events and circumstances are difficult
or impossible to predict and will differ from assumptions. Many
actual events and circumstances are beyond the control of Atlas and
Archer. These statements are subject to a number of risks and
uncertainties regarding Atlas’ businesses and the Business
Combination, and actual results may differ materially. These risks
and uncertainties include, but are not limited to, the early stage
nature of Archer’s business and its past and projected future
losses; Archer’s ability to manufacture and deliver aircraft and
its impact on the risk of investment; Archer’s dependence on United
Airlines for its current aircraft orders and development process,
and the risk that United Airlines cancels its contracts with
Archer; risks relating to the uncertainty of the projections
included in the model; the effectiveness of Archer’s marketing and
growth strategies, including its ability to effectively market air
transportation as a substitute for conventional methods of
transportation; Archer’s ability to compete in the competitive
urban air mobility and eVTOL industries; Archer’s ability to obtain
expected or required certifications, licenses, approvals, and
authorizations from transportation authorities; Archer’s ability to
achieve its business milestones and launch products on anticipated
timelines; Archer’s dependence on suppliers and service partners
for the parts and components in its aircraft; Archer’s ability to
develop commercial-scale manufacturing capabilities; regulatory
requirements and other obstacles outside of Archer’s control that
slow market adoption of electric aircraft, such as Archer’s
inability to obtain and maintain adequate facilities and Vertiport
infrastructure; Archer’s ability to hire, train and retain
qualified personnel; risks related to Archer’s Aerial Ride Sharing
Business operating in densely populated metropolitan areas and
heavily regulated airports; adverse publicity from accidents
involving aircraft, helicopters or lithium-ion battery cells; the
impact of labor and union activities on Archer’s work force; losses
resulting from indexed price escalation clauses in purchase orders
and cost overruns; regulatory risks related to evolving laws and
regulations in Archer’s industries; impact of the COVID-19 pandemic
on Archer’s business and the global economy; the inability of the
parties to successfully or timely consummate the proposed business
combination, including the risk that any required regulatory
approvals are not obtained, are delayed or are subject to
unanticipated conditions that could adversely affect the combined
company or the expected benefits of the proposed business
combination or that the approval of the stockholders of Atlas or
Archer is not obtained; a decline in Archer’s securities following
the business combination if it fails to meet the expectations of
investors or securities analysts; Archer’s inability to protect its
intellectual property rights from unauthorized use by third
parties; Archer’s need for and the availability of additional
capital; cybersecurity risks; risks and costs associated with the
ongoing litigation with Wisk; the dual class structure of Archer’s
common stock, which will limit other investors’ ability to
influence corporate matters; the amount of redemption requests made
by Atlas’ public stockholders; the ability of Atlas or the combined
company to issue equity or equity-linked securities in connection
with the proposed business combination or in the future, and those
factors discussed in Atlas’ Registration Statement on Form S-4
under the heading “Risk Factors,” and other documents of Atlas
filed, or to be filed, with the SEC. If any of these risks
materialize or if assumptions prove incorrect, actual results could
differ materially from the results implied by these forward-looking
statements. There may be additional risks that neither Atlas nor
Archer presently know or that Atlas and Archer currently believe
are immaterial that could also cause actual results to differ from
those contained in the forward-looking statements. In addition,
forward-looking statements reflect Atlas’ and Archer’s
expectations, plans or forecasts of future events and views as of
the date of this press release. Atlas and Archer anticipate that
subsequent events and developments will cause Atlas’ and Archer’s
assessments to change. However, while Atlas and Archer may elect to
update these forward-looking statements at some point in the
future, Atlas and Archer specifically disclaim any obligation to do
so. These forward-looking statements should not be relied upon as
representing Atlas’ or Archer’s assessments as of any date
subsequent to the date of this press release. Accordingly, undue
reliance should not be placed upon the forward-looking
statements.
Important Information for Investors and Shareholders
In connection with the proposed transaction, Atlas Crest has
filed a registration statement on Form S-4, including a proxy
statement, with the SEC. Additionally, Atlas Crest has filed other
relevant materials with the SEC in connection with the business
combination. Stockholders are able to obtain copies of such
documents, without charge at the SEC's web site at www.sec.gov.
Security holders of Atlas Crest are urged to read the registration
statement / proxy statement and the other relevant materials before
making any voting decision with respect to the proposed business
combination because they contain important information about the
business combination and the parties to the business combination.
The information contained on, or that may be accessed through, the
websites referenced in this press release is not incorporated by
reference into, and is not a part of, this press release.
Participants in the Solicitation
Atlas Crest, its sponsor and their respective directors and
officers may be deemed participants in the solicitation of proxies
of Atlas Crest’s stockholders in connection with the proposed
business combination. Security holders may obtain more detailed
information regarding the names, affiliations and interests of
certain of Atlas Crest’s executive officers and directors in the
solicitation by reading Atlas Crest’s registration statement /
proxy statement and other relevant materials filed with the SEC in
connection with the business combination when they become
available. Information concerning the interests of Atlas Crest's
participants in the solicitation, which may, in some cases, be
different than those of their stockholders generally, will be set
forth in the proxy statement relating to the business combination
when it becomes available.
No Offer or Solicitation
This press release does not constitute an offer to sell or the
solicitation of an offer to buy any securities, or a solicitation
of any vote or approval, nor shall there be any sale of securities
in any jurisdiction in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the
requirements of section 10 of the Securities Act, or an exemption
therefrom.
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For Investors investors@flyarcher.com For Media
Louise Bristow Archer C: 818 398 8091 louise@flyarcher.com
archer@launchsquad.com Andrea Hurst Moelis & Company C: 347 583
9705 andrea.hurst@moelis.com
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