Horizon Aircraft, a Canada-based developer of hybrid-electric VTOL aerial vehicles, has signed a business combination agreement with Pono Capital Three, a special purpose acquisition company (SPAC).

Under this agreement, Horizon’s business will be combined with Pono Three Merger Sub, a wholly-owned subsidiary of Pono. The resultant combined company will then operate as a wholly-owned subsidiary of Pono. It is also expected that Pono will re-domesticate as a Canadian company with a likely name change to “Horizon Aircraft Ltd.”

The business combination valued Horizon Aircraft at USD 96 million. This is expected to result in a combined pro forma equity value of around USD 216 million (before expenses). The transaction is set to close in Q4 2023 or Q1 2024.

The funds generated from the transaction are to be used to further develop the Cavorite X7, Horizon Aircraft’s flagship hybrid electric VTOL, and also support general company operations. The companies expect that such a business combination will support the expansion of Horizon Aircraft to become a leading eVTOL aircraft technology company.

Analyst QuickTake: This business combination is the second time Horizon has taken steps to go public. The first time around, the company was acquired by Astro Aerospace in June 2021 in an equity-based deal that was expected to result in a Nasdaq listing. However, the company once again became independent in August 2022 through a separation from Astro Aerospace through a stock buyback. Horizon is aiming to achieve type certification and commence initial deliveries of its Cavorite X5 in 2026.