Archer Aviation Buys Boeing Businesses in Defense Boost

Archer Aviation has reached a significant agreement with aerospace giant Boeing to acquire three of its businesses, including Wisk Aero, Insitu, and SkyGrid. The deal, which involves Archer issuing new stock to Boeing, values Boeing's stake in the company at 19.75% of its Class A shares.

The acquisition is expected to boost Archer's defense business, with Insitu generating over $200 million in annual revenue from uncrewed aircraft systems (UAS). This adds a significant revenue stream to Archer's existing air taxi and defense businesses.

However, the deal comes at the cost of dilution for Archer investors, who will own a smaller percentage of the company once the deal is completed. Boeing also has two warrants that could lead to further dilution in the future.

The deal is expected to diversify Archer's business and reduce its reliance on Midnight's certification to generate revenue. However, the company still needs to certify its air taxi aircraft and put paying passengers in the air to meet lofty expectations.