Archer Aviation Just Bought a $200 Million Defense Business From Boeing -- by Giving Up 20% of the Company

Archer Aviation (NYSE:ACHR) said Monday it has agreed to buy three businesses from Boeing -- Wisk Aero, SkyGrid, and Insitu. Archer is paying with stock instead of cash, with Boeing receiving newly issued Archer shares equal to 19.75% of the Class A shares outstanding immediately before the deal closes.

The biggest of the three by revenue is Insitu, a military drone business that Archer says is profitable. Insitu brings in more than $200 million in annual sales, which dwarfs Archer's own annual revenues in the singly digit millions.

Investors seemed to like the news, with Archer stock finishing Monday up more than 11%.

What Archer is acquiring

• Insitu makes unmanned aircraft systems (UAS) -- drones -- used for surveillance and reconnaissance. Archer says the business serves customers in 35 countries. Of the three businesses, this is the one that already sells a finished product to paying customers.
• Wisk is developing an autonomous air taxi and has a certification application pending at the Federal Aviation Administration (FAA) for its latest model, which first flew in December 2025.
• SkyGrid sells software that manages automated aircraft in shared airspace -- tracking where uncrewed aircraft are, keeping them out of each other's way, and fitting them in alongside ordinary air traffic.

The terms of the deal

Along with the shares, Boeing receives two warrants -- contracts giving it the right to buy stock later at a set price -- each worth roughly $100 million. It also gets a seat on Archer's board and is locked out of selling its shares for at least a year.

The companies say they expect to close by the end of the year, though the contract runs to May 9, 2027, and the deal still needs antitrust and national-security clearances.

What the deal means for Archer

Archer reported its second-quarter results after the market closed today. The company’s net loss widened from last quarter to $263.2 million, and it finished June with about $1.56 billion in cash on hand, down roughly $215 million from Q1.

Archer is spending an enormous amount of money to develop an air taxi that still can't carry paying passengers. So, adding a business with more than $200 million in annual revenue is a considerable win. Having real customers paying real money today -- while its aircraft waits on the FAA -- could provide a financial lifeline.

That being said, Boeing hasn't supplied audited financials for the businesses it's selling; until then, we can’t know exactly what Archer is really getting. The details matter quite a bit. "Profitable" and "more than $200 million in revenue" are Archer's words and could end up sounding much better than they look on an actual earnings report.

I do think this deal makes Archer a better company than it was on Friday, but it’s too early to say for sure how much so. Until we know the audited financial details of the three companies, we can only guess. If this ends up meaningfully extending Archer’s runway and opening new lines of business, it will have been worth the significant dilution.

Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Boeing. The Motley Fool has a disclosure policy.