The Daily Dish (2/10/21)
Welcome to the Daily Dish. Every morning in your inbox subscribers receive some Dishes that we find interesting and we think that you should know more about.
We’ll try to lob ‘em up to you in a simple, clean format that you can read in 5 minutes before the market opens. (Trust me, we know what it’s like to wake up at 9:23am).
Here’s the first assist 👇
Archer, a leading Urban Air Mobility (“UAM”) company and developer of all-electric vertical take-off and landing (“eVTOL”) aircraft, and Atlas Crest Investment Corp. ($ACIC), a special purpose acquisition company, today announced they have entered into a definitive agreement for a business combination. Based in Palo Alto and led by co-founders and co-CEOs Brett Adcock and Adam Goldstein, Archer’s mission is to advance the benefits of sustainable air mobility and become the leader in the new era of UAM, a $1 trillion plus market, according to leading industry research. Archer is developing the world’s first commercially viable all-electric UAM platform that will move people throughout the world’s cities in a fast, safe, sustainable, and cost-effective manner.
The fully electric vertical takeoff and landing aircraft is expected to be capable of traveling distances of up to 60 miles at 150 mph using technology available today and will transform how people approach everyday life, work and adventure, while benefiting the environment and a future zero emissions world. This is particularly important as urban density continues to grow.
In further news, United Airlines today announced that it has entered into an agreement to invest in Archer as part of the airline’s broader effort to partner with leading technology companies that will decarbonize air travel. Under the terms of the agreement, United has placed an order, subject to United’s business and operating requirements, for $1 billion of Archer’s aircraft, with an option for an additional $500 million of aircraft. United, in partnership with Mesa Airlines, could give customers a quick, economic and low-emission way to get to airports within its major hubs by 2024.
The collaboration agreement provides for close coordination between United Airlines and Archer in a commercialization approach which emphasizes existing technology and elegant design to facilitate regulatory approvals and efficient manufacturing culminating in a luxury experience at a scaled, low delivered cost point. United estimates that using one of Archer’s eVTOL aircraft could reduce CO2 emissions by up to 50% per passenger on a trip between Hollywood and Los Angeles International Airport (LAX), which is one of the initial cities Archer plans to launch their fleet and one of United’s largest hubs.
Archer’s highly accomplished team of top engineering and design talent, with a collective 200+ years of eVTOL experience, are driving this next transportation revolution. The full scale eVTOL aircraft is expected to be unveiled in 2021.
The Beachbody Company, a Leader in Digital Fitness Streaming and Nutrition Solutions, to merge with Forest Road
The Beachbody Company announced today its intention to become a public company by entering into a definitive three-way merger agreement with Forest Road Acquisition Corp. ($FRX), and Myx Fitness, an at-home connected fitness platform featuring an industry leading bike and home studio. Beachbody will continue to be led by Carl Daikeler, Beachbody’s co-founder, Chairman and Chief Executive Officer and Jon Congdon, co-founder of Beachbody and CEO of Openfit. Forest Road’s strategic advisor Kevin Mayer, former CEO of TikTok and visionary leader behind Disney+, will join the combined company’s Board of Directors.
With brands such as P90X®, INSANITY® and 21 Day Fix®, Beachbody has consistently expanded its market share over the past two decades through its proven model of integrating the most comprehensive library of premium fitness content with easy-to-follow nutrition guidance and supplements. Through the BOD and Openfit platforms, the Company has developed a diverse offering of live and on-demand content as well as nutrition solutions that reach a passionate and loyal community, including more than 2.6 million paid digital subscribers.
With the addition of Myx, the Company now will offer personalized workouts based on machine learning and heart rate data. With an attractive price point of $1,299, Myx sold over 27,000 bikes in its first year of operation, and has a highly engaged customer base of users who complete an average of 15 workouts each month.
Mr. Mayer commented: “The Company’s engagement and retention metrics validate the quality and depth of its content library and direct-to-consumer (DTC) technology capabilities. I see many parallels at Beachbody with the work we did at Disney, where we aggressively accelerated our digital transformation and leveraged our content to build Disney+, ESPN+ and Hulu.”
In addition to the approximately $300 million held in Forest Road’s trust account (assuming no redemptions), institutional investors, including Fidelity Management & Research Company LLC and Fertitta Capital, have committed to a private placement (“PIPE”) of $225 million to purchase shares of Class A common stock of the combined company that will close concurrently with the business combination.
The transaction implies a pro forma enterprise value for Beachbody of approximately $2.9 billion, or 2.0x 2022 estimated revenue. It is anticipated that the combined company will have over $420 million of unrestricted cash on the balance sheet, assuming no redemptions from the trust account, to fund its future growth and M&A plans.
“We believe there are huge opportunities for charging and EVBox will become a global leader,” KSP President David Park said in an interview. He said the companies will consider installing charging stations at Koch offices across the globe. He declined to provide the size of the firm’s commitment to EVBox, which hasn’t previously been disclosed.
Since November, the new growth equity arm of Koch Investments has invested $1.2 billion across four thematic sectors: computing and connectivity; energy transformation; industrial automation; and health care, Park said. Roughly $350 million is energy transformation, including through private investments in public equity, or PIPEs, supporting SPAC mergers with REE Automotive, Freyr AS and Microvast.
By year-end, the Koch unit is targeting a total outlay of $2 billion to $3 billion.
“We’re looking to take material minority equity positions in great companies with strong management teams that operate in industries with tailwinds,” Park said. “We want to partner with companies that can potentially transform Koch Industries and experience a mutual benefit by accelerating growth with our assistance in penetrating the U.S. market or through sharing in-house technology and sales capabilities.”
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