Kernel Group Holdings (NASDAQ: KRNLU), a special purpose acquisition company or SPAC, said it entered an agreement to merge with AIRO Group Holdings, Inc., a closely held aerospace and defense company with operations including avionics, training, commercial drones and electric air mobility.
The deal is meant to accelerate the development of the Jaunt Journey eVTOL air taxi, which is part of AIRO’s portfolio of businesses.
Under the terms of the merger transaction, AIRO and Kernel will become units of PubCo, a Delaware-based holding company. The companies valued the transaction at about $847 million on a pro forma enterprise basis and said they expected to close the deal during the third quarter of this year.
AIRO said its Advanced Avionics Division, which includes the Aspen Avionics brand familiar throughout general and business aviation operations, will help lead the way to autonomous electric air mobility with the help of AIRO’s other business units.
While Jaunt is part of AIRO’s air mobility operation, the company’s drone business is expected to bring advanced artificial intelligence to eVTOL project to help transition the Journey, currently a piloted aircraft, to autonomous flight. The Journey, under development for several years, is designed to carry up to four passengers over a distance of 80 to 120 miles at a top speed of around 152 knots.
The company said its training division, which has decades of experience in civilian and military flight training, is tasked with developing “a curriculum that bridges the divide between uncrewed, minimally crewed and crewed aviation.”
According to Dr. Chirinjeev Kathuria, AIRO’s executive chairman, “The attractiveness of AIRO is based on four key factors; 1) the strength of the brands and existing orders and contracts, 2) a diversified yet synergistic portfolio that is already proving its robustness with AIRO’s support of drone technologies in Ukraine, 3) a training division that is participating in the $6.40 billion U.S. D.O.D. contract program to provide Close Air Support, Intelligence, Reconnaissance, Surveillance and Adversary Air training, which will drive significant revenue and profit growth, and 4) a management team with significant experience and global successes that span an evolving defense 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,” says AIRO CEO, Joe Burns. “AIRO is proud to have received numerous pre-order commitments as well as multiple US DoD contracts aimed at optimizing eVTOL speed and minimizing acoustic signatures for quiet operations.”
