Sarcos Corp. entered into a non-binding term sheet to acquire Rotor Acquisition Corp. (NYSE:ROT) from a group of shareholders in a reverse merger transaction on February 1, 2021. Sarcos Corp. entered into an agreement and plan of merger to acquire Rotor Acquisition Corp. (NYSE:ROT) from a group of shareholders in a reverse merger transaction for approximately $1.5 billion on April 5, 2021. As reported, Sarcos' existing shareholders will exchange 100% of their equity of Sarcos for 120 million shares of common stock of Rotor. They also will be entitled to receive up to an additional 28.1 million common shares, subject to the trading price of the combined company's common stock reaching certain levels in the future, as specified in the merger agreement. The transaction represents an enterprise value of $1.3 billion for the combined company, plus a potential earnout of an additional $281 million based on the combined company's future share trading price. Sarcos Corp. will become publicly listed through the merger transaction. Upon completion of the transaction, Sarcos expects to have up to $496 million in cash, before expenses and assuming no Rotor shareholder redemptions, to fund business plans, facilitate potential bolt-on acquisitions, and enhance capabilities. This includes approximately $276 million of cash held in Rotor's trust account from its initial public offering (assuming no shareholder redemptions) and approximately $220 million from a committed PIPE investment, at $10.00 per share. Key PIPE investors include funds and accounts managed by BlackRock, Millennium Management LLC, Palantir Technologies Inc., Caterpillar Venture Capital Inc., Schlumberger, Michael F. Price, JAWS Estates Capital, LLC, Sarcos Chairman and Chief Executive Officer, Ben Wolff, and founders of Rotor Acquisition Corp. Sarcos' existing shareholders will roll-over 100% of their equity to own approximately 68.2% of the outstanding shares of the combined company at closing, Rotor shareholders and sponsor will own 15.7% and 3.6% respectively and PIPE investors will own 12.5%. Upon closing, the combined company will be named Sarcos Technologies and Robotics Corporation and its common stock is expected to trade on Nasdaq under the ticker symbol “STRC”. The post-closing company's common stock and warrants are expected to commence trading on the Nasdaq on September 27, 2021, under the ticker symbols “STRC” and “STRCW,” respectively.

The merger agreement may be terminated under certain customary and limited circumstances. Sarcos is currently evaluating potential director nominees and executive officer appointments, but expects that the directors and executive officers of the post-combination company upon consummation of the proposed Business Combination will include the following: Benjamin G. Wolff, Chairman and Chief Executive Officer; Steven Hansen, Chief Financial Officer; Marian Joh, Chief Operating Officer; Kristi Martindale, EVP, Chief Product & Marketing Officer; Dr. Fraser Smith, Chief Innovation Officer; Dr. Marc Olivier, Chief Architect; Tom Jackson, President, Sarcos Defense; Dr. Denis Garagic, Chief Scientist, Advanced Systems & AI. Non-Employee Directors includes Brian D. Finn, Peter Klein, Laura J. Peterson, Admiral Eric T. Olson (Ret.), Dennis Weibling, Matthew Shigenobu Muta and Priya Balasubramaniam. The company's new board of directors will be comprised of current and former leaders from Apple, The Boeing Company, Credit Suisse, Delta Air Lines, Microsoft, Nextel, and the U.S. Department of Defense.

The transaction is subject to the satisfaction of customary closing conditions, including regulatory approval, the waiting period applicable to the mergers under the HSR Act having expired (or early termination having been granted), the approval of Rotor's stockholders, approval of the merger by the stockholders of Sarcos and a minimum cash balance comprised of funds in trust and proceeds from the PIPE of not less than $200 million, the Rotor Class A shares to be issued pursuant to the agreement shall be listed on an applicable Stock Exchange, Rotor having at least $5,000,001 in net tangible assets, Rotor shall have entered into employment agreements with certain executives of Sarcos, Rotor shall have delivered the Amended and Restated Charter of Rotor, a copy of the Registration Rights Agreement, duly executed by Rotor and the Sponsor and written resignations of all directors of Rotor as of immediately prior to the closing . Sarcos shall have received the consent of Sarcos' preferred stock to effect the conversion of shares of Sarcos' preferred stock into shares of Sarcos' Class A common stock as of immediately prior to the effective time and Sarcos' Warrants shall have been exercised as contemplated by the Warrant Exercise Notices. The Special Committee of Board unanimously recommended the approval of the merger agreement to the Board and that the Board recommend to the holders of the Company's common stock that they approve such matters. Rotor's Board of Directors acted upon the unanimous recommendation of a Special Committee of independent and disinterested directors of Rotor and thereafter, the transaction has been unanimously approved by the Boards of Directors of both Sarcos and Rotor. Rotor Board and Sarcos' Board recommended their approval to the holders of their respective common stock. Rotor shareholders will hold a meeting on September 15, 2021 to approve the transaction. As of September 15, 2021, Rotor Acquisition' shareholders approved the transaction. The transaction is expected to close in the third quarter of 2021.

Jefferies LLC and PJT Partners, LP acted as financial advisors to Sarcos and Kathy H. Ku, Patrick Schultheis, Michael Nordtvedt and Matt Squires of Wilson Sonsini Goodrich & Rosati, Professional Corporation is acting as its legal counsel. Mark Director and Evan D'Amico of Gibson, Dunn & Crutcher LLP acted as legal counsels to Rotor Acquisition and Rotor Sponsor LLC, and Credit Suisse Securities (USA) LLC acted as sole financial and capital markets advisor to Rotor Acquisition. Scott Golenbock and Iliana Ongun of Milbank LLP acted as legal counsels to the Special Committee of Rotor's Board of Directors, and Houlihan Lokey Capital, Inc. acted as financial advisor and provided fairness opinion to the Special Committee. Morrow & Co., LLC acted as the information agent to Rotor Acquisition Corp. and will receive a fee of $0.05 million for its services. Houlihan Lokey is entitled to an aggregate fee of $0.625 million for its services, $0.25 million of which became payable upon the execution of an engagement letter, and the balance of which became payable upon the delivery of Houlihan Lokey's opinion to the Special Committee. Mark Zimkind of Continental Stock Transfer & Trust Company acted as the transfer agent to Rotor. PJT Partners, LP acted as financial advisor to Rotor. David M. Schwartzbaum of Covington & Burling LLP acted as legal advisor to Houlihan Lokey in the transaction. Baird's Global Investment Banking Group acted as capital markets advisor in the transaction.

Sarcos Corp. completed the acquisition of Rotor Acquisition Corp. (NYSE:ROT) from a group of shareholders in a reverse merger transaction on September 24, 2021. Trading is expected to commence on Nasdaq on Monday, September 27, 2021.