Blade set to go public in SPAC

By Doug Gollan, December 15, 2020

The deal values Blade at an estimated pro forma equity value of $825 million

Blade Urban Air Mobility follows SurfAir and Kenn Ricci, the principal of Flexjet, Sentient, FXAIR, PrivateFly owner Directional Aviation, into the public markets. Like the West Coast flight-sharing service and Ricci’s Zanite Acquisition Corporation, the vehicle is a special purpose acquisition company known as a SPAC.

The move will “accelerate its transition from conventional aircraft to eVTOL,” according to a press release.

When consummated, Blade will become publicly listed on NASDAQ through a business combination with Experience Investment Corp. (NASDAQ: EXPC), a public entity sponsored by an affiliate of KSL Capital Partners. The transaction is expected to close in the first half of 2021.

According to a release, the deal values Blade at an estimated pro forma equity value of $825 million upon consummation. The transaction will provide $400 million in gross proceeds. That includes Experience Investment Corp.’s cash held in trust and an upsized and oversubscribed $125 million fully committed PIPE at $10.00 per share. Commitments include affiliates of KSL Capital Partners, Hedosophia, HG Vora Capital Management, and David Geffen, as well as original investors Barry Diller, David Zaslav, and Robert W. Pittman.

Urban mobility to reach $650 billion by 2030

The company says more people fly helicopters in and out of U.S. city centers via Blade than any other company in the world. According to Morgan Stanley Equity Research, urban air mobility is expected to be a $125 billion market by 2025 and grow to $650 billion over the next decade.

Blade and Experience Investment Corp. (NASDAQ: EXPC and EXPCW), a NASDAQ listed special purpose acquisition company sponsored by an affiliate of KSL Capital Partners, signed a definitive business combination agreement which Blade will merge into a subsidiary of Experience Investment Corp. It will change its name to Blade Urban Air Mobility. Upon closing the transaction, the combined operating company is expected to continue to be listed on NASDAQ.

Blade has developed exclusive passenger terminal infrastructure in key markets. They provide competitive differentiation in geographically constrained locations.

In its release, the company said, “Blade was specifically designed to be scalable and profitable using conventional helicopters today, while poised to seamlessly transition to eVTOL as soon as those aircraft are ready for public use, passing on lower operating costs to fliers and enabling a reduced noise footprint and zero carbon emissions for the communities the company serves.”

Blade’s business lines

Blade operates in four key lines of business:

·         Short Distance – Flights between 60 and 100 miles in distance. These primarily service commuters for prices between $595 and $795 per seat (or $295 for monthly commuter pass holders).

·         BLADE Airport – Flights between all New York area airports and dedicated Blade lounges in Manhattan’s heliports. Prices start at $195 per seat or $95 per seat with the purchase of an annual Airport Pass.

·         BLADE MediMobility – Blade says it is the largest transporter of human organs in the Northeast United States. Organ movements are expected to be one of the first uses of eVTOL before flights for passengers.

·         International Joint Ventures – BLADE forms joint ventures with local partners in key overseas markets. It will provide the technology, customer experience, infrastructure design, and employee training, that enables a scalable and consistent experience. Blade’s first international joint venture launched helicopter services late last year in India, flying between Mumbai, Pune, and Shirdi.

Blade expansion plans

The company expects to use proceeds from the transaction to fund expansion into new markets. That includes the Northeast Corridor and West Coast in the United States and internationally in Asia. It will also pursue infrastructure acquisitions in these markets. These will improve unit economics for its current business while enabling a transition to eVTOL aircraft.

Rob Wiesenthal, Founder and Chief Executive Officer of Blade, commented, “Ground mobility has been radically transformed by software and battery technology, as evidenced by the rapid adoption of electric vehicles. The next battle is in the air. This transaction provides the capital for Blade to profitably expand its urban air mobility business using conventional rotorcraft today while providing a seamless transition to eVTOL aircraft tomorrow.”

Eric Affeldt, Chief Executive Officer and Chairman of Experience Investment Corp. added, “Our deep investing expertise in aviation led us to evaluate dozens of potential opportunities, of which none proved as compelling an investment opportunity as Blade..”

KSL’s portfolio company, Ross Aviation, operates 17 FBOs in North America, including in New York, Massachusetts, and California. The alliance may provide opportunities for Blade to accommodate eVTOL routes, maintenance, and charging stations in key markets.

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