UK electric air taxi maker Vertical Aerospace to float in New York via SPAC merger

Vertical Aerospace, a UK-based maker of electric vertical take-off and landing (eVTOL) aircraft, has agreed a merger with a special purpose acquisition company (SPAC) listed in New York and announced US$4bn of orders that will see its air taxis used by Virgin Atlantic in London, Manchester and around Europe and American Airlines in the US.

Completion of the merger with Broadstone Acquisition Corp (NYSE:BSN) is expected before the end of the year with a predicted valuation for Vertical of roughly US$1.84bn and a pro forma equity value of US$2.2bn at the $10 per share ‘PIPE’ price.

The Bristol-based company is expected to reap proceeds of US$394mln from its reverse IPO, with investors including Microsoft’s M12 venture capital fund, American Airlines, Avolon, Honeywell, Rolls-Royce, Rocket Internet and 40 North.

All in all, Vertical said it had up to 1,000 aircraft pre-orders of its VA-X4 electric eVTOL aircraft with launch customers Avolon, American Airlines and Virgin Atlantic to introduce the ‘ultra-short-haul’ aircraft category to commercial aviation for the first time, valued at a potential total up to US$4bn.

The VA-X4 is a piloted aircraft that is designed to carry four passengers up to around 100 miles, using four electrically powered tilting rotors at the front and stowable rotors at the rear.

By being able to take off and land vertically it can operate in and out of cities and other confined locations, with engines that are said to be “100 times quieter and safer” than a helicopter.

Virgin Atlantic is taking between 50 and 150 of the aircraft and is also looking into potentially forming a joint venture with Vertical to help speed development.

Shai Weiss, CEO of Virgin Atlantic, said: “Our partnership includes an option for Virgin Atlantic to acquire up to 150 eVTOL VA-X4 aircraft and exploration of a Joint Venture to bring short haul, electric vehicle connectivity to cities and our UK airport hubs, starting with London Heathrow as well as Manchester and London Gatwick.”

Virgin envisioned the 56-mile journey from Cambridge to London Heathrow being reducing to just 22 minutes in a VA-X4 air taxi, compared to a 90 minute drive by road.

With 37 towns and cities with populations over 100,000 were situated within 100 miles of Heathrow, Virgin said the VA-X4 “offers huge potential to support zero-emissions short-haul transfers for 7.7 million customers outside of London, for flights to and from the UK’s main hub airport”.

As part of its equity investment and order for up to 500 aircraft, Avalon said it will collaborate with the Bristol-based eVTOL company through the further development of the VA-X4, including its road map to certification and subsequent commercial roll-out, while other partnerships are in place with American Airlines, Honeywell, Rolls-Royce, Melrose Industry’s GKN and Solvay.

Story by ProactiveInvestors