Archer Aviation Buys Boeing Businesses for $200 Million All-Stock Deal

Archer Aviation has agreed to acquire three Boeing businesses -- Wisk Aero, SkyGrid, and Insitu -- in an all-stock deal. As part of the agreement, Boeing will receive newly issued Archer shares equal to 19.75% of the Class A shares outstanding immediately before the deal closes.

The biggest of the three businesses is Insitu, a military drone maker with over $200 million in annual revenue. Insitu brings in significantly more revenue than Archer's own annual sales in the single digit millions. This acquisition could provide Archer with much-needed cash flow while its air taxi awaits FAA certification.

Archer's stock finished Monday up more than 11% after the news was announced. The deal still needs antitrust and national-security clearances, but the companies expect to close by the end of the year. Boeing will also receive two warrants worth roughly $100 million each and a seat on Archer's board.

Investors are cautious about the deal, as Boeing hasn't supplied audited financials for the businesses it's selling. Until then, it's unclear what Archer is really getting in this acquisition. However, if the deal ends up extending Archer's runway and opening new lines of business, it could be worth the significant dilution.

The terms of the deal also include Boeing being locked out of selling its shares for at least a year. The contract runs to May 9, 2027. This acquisition is a considerable win for Archer, especially considering Insitu's profitable status and substantial revenue.