The parent company of eVTOL developer Jaunt Air Mobility and air mobility, autonomy and aerospace platform Aspen Avionics, AIRO Group Holdings, has entered into a merger agreement with SPAC Kernel Group Holdings that provides a path to becoming a publicly listed company.

Upon closing of the merger transaction, AIRO and Kernel will be wholly-owned subsidiaries of a new Delaware holding company, PubCo, whose common stock and warrants are expected to be listed on Nasdaq under the symbols AIRO and AIROW respectively.

AIRO executive chairman and co-founder Dr Chirinjeev Kathuria MD, MBA says: “The attractiveness of AIRO is based on four key factors. Firstly, the strength of the brands and existing orders and contracts. Secondly, a diversified yet synergistic portfolio that is already proving its robustness with AIRO's support of drone technologies in Ukraine. Thirdly, a training division that is participating in the $6.40 billion US Department of Defence contract programme to provide close air support, intelligence, reconnaissance, surveillance and adversary air training, which will drive significant revenue and profit growth. And fourthly, a management team with significant experience and global successes that span an evolving defence and aerospace marketplace that's changed significantly over the last four decades.”

“Operators are looking for a pedigree of certification and safety as well as robust, dynamic capabilities, efficiencies and quiet operations,” adds CEO Joe Burns. “AIRO is proud to have received numerous pre-order commitments as well as multiple US DoD contracts aimed at optimising eVTOL speed and minimising acoustic signatures for quiet operations. Aircraft certification is driven out of AIRO's electric mobility office in Montreal, and the certification will be validated through the FAA and EASA shortly thereafter.”

AIRO's four key divisions - advanced avionics; electric air mobility; uncrewed air systems; and training - focus on critical elements that will bring autonomy, AI and advanced operations to mainstream commercial and military marketplaces. Its electric air mobility division is leading with its Jaunt Journey aircraft and is working with Transport Canada towards certification under Chapter 529: Transport Category Rotorcraft. With nearly 300 flight hours and well over 1,000 take offs and landings, Jaunt Journey's slowed rotor compound technology is both safe and quiet.

Following the closing of the proposed transaction, Dr Kathuria will serve as the chairman of the board of directors. The board will consist of nine members including AIRO CEO and co-founder Joe Burns, president and COO John Uczekaj, Kernel chairman and CEO Suren Ajjarapu and Michael Peterson, a current member of the Kernel board of directors.

Ajjarapu says: “AIRO leverages decades of industry expertise across the drone services, aviation and avionics markets to offer a sector-leading enterprise providing innovative aerospace, urban air mobility and UAS products and services. We think that the combination will result in positive valuations and long term growth, as we build the leading mid-market publicly traded aerospace and defense company.”

The proposed transaction was unanimously approved by the boards of directors of all parties, at an expected combined pro forma enterprise value of approximately $847 million. It is expected to be completed in Q3 2023.