Alpine 4 Technologies Ltd (OTCQB:ALPP) announced Tuesday that it has entered the commercial drone market.
In a statement, the company said it has struck a binding merger agreement with Impossible Aerospace Corporation, which builds high-performance electric aircraft and drones.
Alpine 4 said the deal will be completed in a reverse triangular merger transaction and upon meeting the final closing conditions by December 10, Impossible Aerospace will become a wholly owned subsidiary of Alpine 4.
READ: Alpine 4 Technologies sees 3Q revenue jump 23% driven by sales from its subsidiaries
Impossible Aerospace’s customers range from the US Airforce to the City of Santa Clara, and other municipalities. The company is also Alpine 4's first acquisition in the UAV space and will serve as a cornerstone to build upon.
Alpine said the shareholders of Impossible Aerospace are primarily a grouping of larger venture capital funds such as Bessemer Venture Partners, Eclipse Ventures, Airbus Ventures, and company CEO Spencer Gore.
The company added that Impossible Aerospace CEO has been retained to help assist in the knowledge transfer of US-1 Drone and to assist in procuring new US military contracts.
"The essence of Alpine 4 is our business model of DSF- Driver, Stabilizer, Facilitator," said Apline 4 CEO Kent Wilson. “For the past 4 years, we have been actively acquiring revenue-generating companies that fall into the Stabilizer and Facilitator categories. We purposefully did this to add infrastructure and substance to our corporate holdings.”
Unicorn Driver company
Wilson said that he recognized early on that Impossible Aerospace (IA) was what he called a unicorn Driver company.
“They checked off all the boxes; patented or patentable IP, leading-edge but not bleeding edge technology, well-funded development behind its IP, and a market space of $5 billion or larger,” he explained.
“Couple that with the fact that Alpine 4's subsidiary, Quality Circuit Assembly Inc, has been building many of the essential components that go into Impossible Aerospace's revolutionary US-1 drone, furthering our desire to make the acquisition.”
Wilson added: “Early in the manufacturing relationship with Impossible Aerospace, I expressed my interest in Alpine 4 one day acquiring IA to our sales leadership team at QCA. This year we were able to have a substantive dialogue with Spencer Gore, the CEO of IA, about what a transaction might look like. We both agreed that Alpine 4 and its vast manufacturing resources and commercial connections would make IA a home run in the Alpine 4 umbrella of companies."
CEO Gore said both companies intend to build the nation's most vertically integrated UAV manufacturer.
“While most domestic drone makers today rely on a jumbled network of third-party vendors for key components, we envision a single factory that receives raw materials in one door and ships validated aircraft out the other -- enabling better products, faster development cycles, and higher profit margins,” Gore added.
Transaction highlights include:
- Mature and Highly Developed Drone Ecosystem: The acquisition of IA will allow Alpine 4 to dominate the emerging drone market with market-leading airframe and battery technology that enables real missions over 70 minutes.
- Multiple Large Market Opportunities: The ancillary markets of EMS Surveillance and Short Haul Delivery that can be supported by IA's drone technology are large and growing.
- Patented IP: Granted in the purchase of IA by Alpine 4 is supported by two patents pending and five provisional patents.
- Vertical Manufacturing: Having the IA manufacturing process within our subsidiary, Quality Circuit Assembly Inc, will greatly enhance hye company's ability to push production efficiencies to the front line. The time it takes to go from prototype to production will be cut in half.
- Impossible Aerospace: IA builds high-performance electric aircraft that save lives. Founded in 2016 by Gore, also a former Tesla engineer, IA unveiled its US-1 aircraft in 2018, unique for its long endurance and US origin. The company was formerly backed by Bessemer Venture Partners, Eclipse Venture, and Airbus Ventures.
Contact the author: patrick@proactiveinvestors.com
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