Embraer-backed Eve will be publicly traded through a New York Stock Exchange listing after completing a merger with Zanite Acquisition Corp, a special purpose acquisition corporation or SPAC.
Announced this morning, the deal is expected to close in the second quarter. Embraer S.A. subsidiary Embraer Aircraft Holding, Inc., will remain a majority stockholder with an approximately 80% equity stake in Eve Holding following the closing of the business combination, including its investment in the PIPE.
Executives believe Eve Holding, Inc., which will trade under EVEX and EVEXW, will fare better than other SPACs. According to Bloomberg, as of mid-November, an index of SPACs underperformed the S&P 500 Index by more than 50 percentage points post-merger.
Among a host of companies looking to disrupt various segments of aviation, Wheels Up Experience closed yesterday at $4.23 after hitting a high of $15 on its first day of trading. Blade Air Mobility closed at $8.59, off a 52-week high of $19.88. Joby Aviation closed at $6.79, down from a high of $17, while Lilium NV was trading at $7.31, less than half its top price of $15.53.
Former BAE Systems CEO Jerry DeMuro, who joins Eve as co-CEO, says the company’s strategic partnership with Embraer is a “competitive advantage.”
Embraer has over 18,000 employees, is the third largest manufacturer of commercial jets, and has delivered more than 8,000 airplanes. It has contributed its urban air mobility-related assets, employees, and IP to Eve in connection with the transaction.
In addition, Embraer has granted Eve a royalty-free license to Embraer’s background IP to be used within the UAM market. Eve has access to thousands of skilled Embraer employees on a flexible, first-priority basis and use of Embraer’s global infrastructure with more than 80 locations on preferred terms.
The Embraer alignment provides Eve with significant cost and execution advantages relative to other UAM participants, executives claim.
“We believe that the urban air mobility market has enormous potential to expand in the coming years based on an efficient, zero-emissions transport proposition and that with this business combination, Eve is very well positioned to become one of the major players in this segment,” said Francisco Gomes Neto, president and CEO of Embraer. “As a global aerospace company, with a leadership position in multiple segments, we understand that innovation and technology play a strategic role in driving sustainable growth and redefining the future of aviation.”
Eve holds an order pipeline of approximately $5 billion, comprised of 1,735 vehicle orders, via non-binding letters of intent, from 17 launch customers, including fixed-wing and helicopter operators, aircraft lessors, and ride-sharing platform partners.
One key customer is Directional Aviation’s One Sky Flight unit, which ordered 200 eVTOLs earlier this year. It plans to use the aircraft to replace helicopters in its Halo unit. The idea is to allow well-heeled clients of its Flexjet fractional jet ownership operator and charter brokers Sentient Jet, FXAIR and PrivateFly to hop between private airports and their destination, bypassing increasing urban gridlock. Directional principal Kenn Ricci is co-CEO of Zanite.
Eve’s yet-to-be-named initial vehicle is expected to enter commercial service in 2026, carrying up to four passengers on missions between 10 and 60 miles. Executives say Embraer’s vast experience getting aircraft certified is another advantage.
The deal implies a $2.4 billion enterprise value. Assuming no redemptions by Zanite’s stockholders, Eve will have approximately $512 million in cash at closing. Proceeds raised in the transaction are expected to be used to fund operations, support growth and for general corporate purposes.
According to the announcement, proceeds will be funded through a combination of Zanite’s $237 million cash in trust, assuming no redemptions by Zanite’s stockholders, and a $305 million PIPE of common stock at $10.00 per share, comprised of commitments of $175 million from Embraer, $25 million from Zanite’s sponsor and $105 million from a consortium, including Azorra Aviation, BAE Systems, Banco Bradesco, Falko Regional Aircraft, Republic Airways, Rolls-Royce and SkyWest. Embraer has agreed to a three-year lockup on its rollover shares and Zanite’s sponsor has agreed to a three-year lockup on its founder shares.
Eve has yet to disclose the sale price of its launch eVTOL.