(Reuters) – Electric aircraft startup Archer, which is getting solid backing from United Airlines, will go public through a merger with a blank-check company backed by investment banker Ken Moelis (NYSE:) in a deal valued at around $3.8 billion.
The deal with Atlas (NYSE:) Crest Investment Corp, announced on Wednesday, is expected to provide $1.1 billion of proceeds to the company which makes electric aircraft with vertical take-off and landing.
Archer and Atlas Crest said the proceeds include a $600 million private investment from United Airlines Holdings (NASDAQ:) Inc, Ken Moelis and Mubadala Capital, the investment arm of Abu Dhabi’s state investor Mubadala Investment Co.
Separately, United Airlines said it would buy $1 billion of Archer’s aircraft, with an option to buy an additional $500 million of aircraft, as part of its decarbonization efforts.
Palo Alto-based Archer was launched in May last year and is backed by Marc Lore, former chief executive officer of Walmart (NYSE:) eCommerce U.S. The company said it is developing an electric aircraft that can travel up to 60 miles at 150 miles per hour.
In December, United Airlines announced a multi-million dollar investment in a project to remove carbon dioxide from the air as part of a plan to be 100% “green” by 2050.
A blank-check company, or a special purpose acquisition company (SPAC), is a shell company that uses capital raised through an initial public offering to buy a private firm, thereby taking it public. They have gained popularity as an alternative to public markets for companies seeking to avoid a traditional IPO.
Moelis-led Atlas Crest raised $500 million in its IPO in October. The veteran banker founded investment firm Moelis & Co in 2007, since when it has advised on more than $3.5 trillion worth of transactions. Moelis also served as the president of UBS Investment Bank.
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