Benzinga | Jul 29, 2021 08:40AM EDT

Archer And Atlas Crest Announce Reset Of Transaction Terms To Adjust Archer's Pro Forma Enterprise Value From $2.7B To $1.7B

* 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

PALO ALTO, Calif.--(BUSINESS WIRE)-- 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.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210729005583/en/

"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.