Vertical AerospaceGroup (Vertical), a UK-headquartered engineering and aeronautical business developing electric Vertical Take-Off and Landing (eVTOL) aircraft, has entered into a definitive agreement for a business combination with Broadstone Acquisition Corp.(Broadstone), a special purpose acquisition company.
The transaction will result in Vertical becoming a publicly-traded company, with a pro forma equity value of approximately $2.2 billion. Vertical will be listed on the New York Stock Exchange following the combination, which is expected to close in the second half of 2021, under the ticker EVTL. Vertical is also announcing today investments from American Airlines, Avolon, Honeywell and Rolls-Royce, who have invested in the PIPE and are part of Vertical’s strategic partner ecosystem; Microsoft’s M12, 40 North and Rocket Internet SE have also invested in the business. Commercial partnerships and individual conditional pre-orders have also been agreed with American Airlines, Virgin Atlantic and Avolon for up to 1,000 aircraft in total, providing a direct route to market and opportunity to work together on key go-to-market workstreams.
Vertical says their mission is to make air travel personal, on-demand and carbon-free through designing, manufacturing, selling and servicing one of the world’s best eVTOL aircraft, the VA-X4. It will travel at speeds over 200mph, be near silent when in flight, produce zero emissions and at low cost per passenger mile. The VA-X4 is expected to be certified to the same standards as large commercial airliners and therefore is expected to be 100x safer than a helicopter.
Vertical intends to certify the VA-X4 to European Union Aviation Safety Agency (EASA) standards – the most stringent global standards – in order to unlock a large UAM TAM of $1 trillion by 2040, with an upside TAM of $4.4 trillion by 20401.
Vertical was founded in 2016 by Stephen Fitzpatrick, an established entrepreneur best known as the founder of the Ovo Group, a leading energy company determined to create a world without carbon and which includes Ovo Energy, the UK’s second-biggest energy retailer with revenues of $6.5billion.Stephen remains the majority shareholder in this business.
During the past five years, Vertical says it has focused on building an experienced and senior team in the eVTOL industry who “have more than 1,200 combined years of experience, and have certified and supported over 30 different civil and military aircraft and propulsion systems.”
Their team includes:
•Michael Cervenka, former head of Future Technologiesat Rolls-Royce
•Eric Samson, former VP Engineering and chief engineer at General Dynamics
•Tim Williams, former chief engineer of Rolls-Royce
•Madhu Bhabuta, former chief technology officer of the UK’s Ministry of Defence
•Dr.Limhi Somerville, former technical manager at Jaguar Land Rover responsible for the cell facility, battery functional safety and advanced cell development
•Paul Harper, former UK chief airworthiness engineer at Airbus
•Eduardo Dominguez, former CEO of Airbus’ Urban Mobility.
American Airlines has agreed to pre-order, subject to certain conditions precedent and future agreed upon milestones, up to 250 aircraft, and an option to order an additional 100 aircraft. Avolon has agreed to pre-orde rup to 310 aircraft with an option for a further 190, and Virgin Atlantic has an option to purchase between 50 and 150 aircraft. In addition, all parties will work together towards the prompt certification and deployment of aircraft in commercial operations.In the United States of America, American Airlines expects to work with Vertical on passenger operations and infrastructure development. In the United Kingdom, Virgin Atlantic and Vertical expect to work together to explore the joint venture launch of a Virgin Atlantic branded short haul eVTOL network, including operations and infrastructure development.
“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'” Stephen Fitzpatrick, Vertical CEO and founder, said. “[This] announcement brings together someof the largest and most respected technology and aeronautical businesses in the world andtogether 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.”
Derek Kerr, CFO of American Airlines said, “Emerging technologies are critical in the race to reduce carbon emissions and we are excited to partner with Vertical to develop the next generation of electric aircraft. For years,American has led the industry in investing in newer, more fuel-efficient aircraft. Today’s partnership is another example of that commitment, and an investment in the future of air mobility. We are excited about the prospect of what this could mean for our customers, and our company.”