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$1.8bn and a pro forma equity value of US$2.2bn at the $10 per share ‘PIPE’ price.

The SPAC deal, which comes just days after another eVTOL deal was completed by Astro Aerospace Ltd (OTCQB:ASDN) and a listing for eVTOL developer Joby Aviation, will see the Bristol-based company reap proceeds of US$394mln, 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 for around 100 to 120 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.”

Vertical says a trip from Heathrow airport to Canary Wharf would take 13 minutes in its VA-X4, versus over 80 minutes by road, while Virgin envisioned the 56-mile journey from Cambridge to Heathrow being reducing to just 22 minutes in an air taxi, compared to a 90 minute drive.

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 Rolls-Royce, Melrose Industries’ GKN and Solvay.

“This is the most exciting time in aviation for almost a century; electrification will transform flying in the 21st century in the same way the jet engine did 70 years ago,” said Stephen Fitzpatrick, CEO and founder of Vertical.

“Today’s announcement brings together some of the largest and most respected technology and aeronautical businesses in the world and together we can achieve our aim of making the VA-X4 the first zero carbon aircraft that most people will fly on. The United Kingdom is already a global leader in aerospace innovation and we believe Vertical Aerospace will be the British engineering champion to drive the aviation industry forward.”

Fitzpatrick is best known in the UK as the founder of OVO Energy, while one of the Broadstone founders is Hugh Osmond, known for his involvement in Pizza Express, Punch Taverns and insurer Phoenix Group.

Vertical’s president is Michael Cervenka, a former Rolls-Royce executive.

Current Rolls-Royce boss Warren East said the partnership with Vertical is an “exciting opportunity demonstrates our joint ambitions to lead the way in the new urban air mobility market”.


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