Embraer's urban air mobility subsidiary, Eve, will list on the New York Stock Exchange (NYSE) next year. The listing will raise capital to further develop and commercialize Eve's product line. After the listing, Embraer will remain a majority shareholder, retaining an 80% equity stake in the business.
Eve gets a lift from parent company Embraer
Set up in 2017, Eve provides a comprehensive urban air mobility package spanning eVTOL design and production, service and support, fleet operations, and urban air traffic management.
Eve has an order pipeline valued at approximately US$5.0 billion. This comprises 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.
“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.
The relationship with Embraer is widely viewed as a key competitive advantage for Eve. Embraer has contributed its urban air mobility-related assets, employees, and intellectual property to Eve. In addition, Embraer has granted Eve a royalty-free license to Embraer’s background intellectual property for use within the urban air mobility market.
Embraer also allows Eve access to thousands of skilled employees on a flexible, first priority basis and use of Embraer’s global infrastructure on preferred terms. The relationship provides Eve with significant cost and execution advantages relative to other urban air mobility participants.
NYSE listing will value Eve at US$2.9 billion
Eve is joining forces with Zanite Acquisition Corporation to execute the listing. The Ohio-based investment company invests in aviation, aerospace and defense, urban mobility, and emerging technology sectors.
Zanite will pony up US$237 million in cash and raise a further U$305 million via their investors to invest in the newly listed Eve. The deal values Eve at $2.4 billion before the listing and approximately $2.9 billion after Zanite's financial leg up.
“The Zanite team is extremely proud to partner with Eve and Embraer in this transaction," said Kenn Ricci, Co-CEO of Zanite. "We selected Eve because of its simple and certifiable eVTOL design, its capital-efficient approach to fleet operations and Embraer’s global footprint that we believe will enable Eve to not only reach vehicle type certification but to scale its manufacturing, support and operations globally.”
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A busy week of announcements for Eve
The news of the NYSE listing caps a busy week of announcements from Eve. In recent days, Eve has announced signing a letter of intent with Azorra, an existing lessor of Embraer aircraft, to order up to 200 of Eve’s electric vertical take-off and landing (eVTOL) aircraft.
Eve has also recently signed a memorandum of understanding and letter of intent with Republic Airways to order 200 eVTOL aircraft. Finally, longtime Embraer customer SkyWest has signed a memorandum of understanding and non-binding letter of intent to take 100 eVTOL aircraft.
It's worth keeping in mind Eve's business model, valuation, and future projections revolve around letters of intent rather than firm orders. But that isn't diminishing the enthusiasm from Eve and its new investor, Zanite.
“Urban air mobility is a transformational opportunity in the aviation sector," says Eve's incoming co-CEO and former BAE Systems CEO, Jerry DeMuro. "I joined Eve because I believe that there is no company better positioned to capitalize on the tremendous potential of this emerging market."
The deal (and NYSE listing) isn't quite done yet. It is expected to close in the second quarter of 2022, subject to the Embraer and Zanite board's approval, regulatory and stockholder approvals, and other customary closing conditions.