SANTA CLARA, Calif. - Anduril Industries and Archer Aviation Inc. (NYSE: NYSE:ACHR), currently valued at $3.18 billion, have announced an exclusive partnership focused on developing a hybrid vertical-take-off-and-landing (VTOL) aircraft designed for defense applications. This collaboration aims at a potential program with the United States Department of Defense (DOD).
The partnership leverages Archer's rapid development capabilities in advanced VTOL aircraft, utilizing commercial parts and supply chains, alongside Anduril's expertise in artificial intelligence, missionization, and systems integration. The joint effort is expected to produce hybrid VTOL capabilities more cost-effectively compared to traditional alternatives.
To support the initiative, Archer has secured $430 million in additional equity capital with contributions from Stellantis (NYSE:STLA), United Airlines, Wellington Management, and 2PointZero, a subsidiary of UAE's IHC. This funding bolsters Archer's total capital raised to nearly $2 billion, positioning the company with a robust balance sheet and eliminating near-term financing needs. According to InvestingPro data, Archer maintains a strong liquidity position with a current ratio of 6.03, holding more cash than debt on its balance sheet. The stock has shown remarkable momentum, gaining nearly 120% over the past six months.
Shane Arnott, SVP of Engineering at Anduril, emphasized the importance of rapid innovation and scalable production for maintaining technological superiority. Adam Goldstein, founder and CEO of Archer, expressed confidence that the partnership and capital infusion would accelerate the development and deployment of advanced aerospace technologies.
The newly formed Archer Defense program will be spearheaded by Joseph Pantalone, a veteran in military aviation with a background at Lockheed Martin (NYSE:LMT) and Sikorsky. Archer Defense aims to draw on the expertise of a Defense Advisory Board established in May 2023, consisting of retired military leaders.
Moelis (NYSE:MC) & Company LLC served as the exclusive placement agent for Archer in this transaction.
This collaboration announcement is based on a press release statement and contains forward-looking statements about Archer's plans, including the anticipated program with the DOD and the use of capital. These statements are predictions and subject to risks and uncertainties that could cause actual results to differ materially. Archer does not commit to updating these statements following the date of this release. Analyst price targets for Archer range from $4.50 to $12.50, reflecting varied expectations about the company's future. For deeper insights into Archer's financial health and growth prospects, including 13 additional ProTips and comprehensive valuation metrics, visit InvestingPro.
In other recent news, Archer Aviation has made significant strides in the commercialization of its electric vertical takeoff and landing (eVTOL) aircraft. The company recently announced a partnership to launch commercial electric air taxi operations in Abu Dhabi, marking a first for the company in the Middle East and North Africa region. This collaboration involves the Abu Dhabi Investment Office, Abu Dhabi Airports, and other aviation stakeholders.
Additionally, Archer Aviation has reported a strong liquidity position with over $500 million in cash reserves. The company is also advancing with the construction of a manufacturing facility in Covington, Georgia, targeting a production rate of two aircraft per month by the end of 2025. Despite an expected increase in operating expenses due to higher engineering and manufacturing costs, Archer continues to receive strong demand for early aircraft delivery.
In terms of analyst coverage, Needham initiated coverage on Archer Aviation with a Buy rating, citing the industry's momentum and the company's capacity to fulfill its large aircraft order book. The firm also pointed out potential short-term catalysts, such as regulatory approvals and the commencement of passenger flights, which could boost investor confidence in the company's long-term prospects. These developments reflect Archer Aviation's ongoing efforts to revolutionize urban air mobility.
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