Archer Aviation Inc. entered into a term sheet to acquire Atlas Crest Investment Corp. for $2.8 billion in a reverse merger transaction.
The transaction values the combined company at an implied $3.8 billion pro forma equity value at the $10.00 per share PIPE price. 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 minimal redemptions of Atlas Crest's existing public stockholders. 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. 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. It is anticipated that the post-closing, the combined company will keep the name Archer, and will be listed on the NYSE with ticker symbol "ACHR.". Following the consummation of the business combination, New Archer's Class A common stock and public warrants are expected to begin trading on the New York Stock Exchange under the symbols ACHR and ACHR WS, respectively. The following persons are expected to serve as directors and executive officers of New Archer following the consummation of the Business Combination: Brett Adcock, Co-Chief Executive Officer and Director; Adam Goldstein, Co-Chief Executive Officer and Director; Tom Muniz Vice President, Engineering and four non-employee Directors. Deborah Diaz, Maria Pinelli, Fred Diaz and Michael Spellacy nominated as post-closing Board of Directors. These nominees will become directors of the combined company following the completion of the proposed business combination of Archer with Atlas Crest. As of August 10, 2021, Ben Lu has been appointed as the Archer's Chief Financial Officer. Ben will oversee the finance and investor relations departments at Archer. Oscar Munoz joins Archer's Board of Directors. As of August 23, 2021, Archer appointed Tosha Perkins as Chief People Officer and Andy Missan as Chief Legal Officer.
The obligations of Atlas and Archer to consummate the Business Combination are subject to certain closing conditions, including, but not limited to, (i) the expiration or termination of the applicable waiting period under the Hart- Scott- Rodino Antitrust Improvements Act of 1976, as amended, (ii) the absence of any law or governmental order or other legal restraint or prohibition preventing the consummation of the Business Combination, (iii) the Registration Statement being declared effective under the Securities Act of 1933, as amended, (iv) the shares of New Class A Common Stock to be issued in connection with the Business Combination having been approved for listing on the New York Stock Exchange, (v) the approval of Atlas' stockholders, (vi) the approval of Archer's stockholders and (vii) Atlas having at least $5,000,001 of net tangible assets (viii) Archer Aviation Preferred Conversion shall have occurred as contemplated by the Conversion Written Consent (ix) the Registration Rights Agreement duly executed by the Archer Stockholders and the satisfaction or waiver of other customary closing conditions. In addition, the obligation of Archer to consummate the Business Combination is subject to, among other conditions, the aggregate cash proceeds from Atlas' trust account, together with the proceeds from the PIPE Financing equaling no less than $600 million. The Boards of Directors of both Archer and Atlas Crest have unanimously approved the proposed business combination. The Boards of Directors of Atlas recommends that Atlas' stockholders vote for the transaction. As of September 14, 2021, the transaction has been approved by the shareholders of Atlas. The transaction is expected to close in second quarter of 2021. As of July 29, 2021, transaction is expected to close in third quarter of 2021. As of August 10, 2021, the transaction is expected to close in the fall of 2021. As of September 15, 2021, the transaction is anticipated to close on or about September 16, 2021.
Barclays Capital Inc. acted as the 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 acted as financial advisor and has provided a fairness opinion in connection with the transaction to the Atlas Crest Board of Directors. Dave Peinsipp, John T. McKenna and Alfred L. Browne III of Cooley LLP acted as legal advisors to Archer. Edward Lee, Jonathan Davis, Romain Dambre, Christian Nagler, Michael Kim, Michael Taufner, Scott Price, Mike Beinus and Vivek Ratnam of Kirkland & Ellis LLP acted as the legal advisors to Atlas Crest. Sullivan & Cromwell LLP represents Stellantis (Netherlands), as a strategic partner and investor in Archer Aviation, Inc. Morrow Sodali LLC acted as proxy solicitor to Atlas Crest Investment. Atlas will pay to Morrow Sodali an approximate fee of $0.04 million, plus disbursements. M ark Zimkind of Continental Stock Transfer & Trust Company acted as transfer agent for Atlas. As compensation for Duff & Phelps' services in connection with the rendering of its Opinion to the Atlas Board, Atlas agreed to pay Duff & Phelps a fee of $0.65 million, earned upon the delivery by Duff & Phelps of the Opinion to the Atlas Board and payable upon consummation of the transaction. PricewaterhouseCoopers LLP and Marcum LLP as accountant for Atlas Crest Investment Corp.