Elroy Air announced that it has entered into a definitive business combination agreement with Columbus Circle Capital Corp II, a SPAC led by the management team of Inflection Point Asset Management and Cohen & Company.
Under the agreement, Elroy Air will become a publicly traded company. Columbus Circle Capital Corp II will be renamed Inflection Point Acquisition Corp VII, and the combined company is expected to trade on Nasdaq under the ticker symbol “ELRY.”
The proposed transaction values Elroy Air at $800 million pre-money and is expected to give the company an enterprise value of approximately $1 billion after closing. The deal includes more than $165 million in committed PIPE capital, with $65 million funding in connection with the execution of the business combination agreement.
Elroy Air said the transaction is expected to fully fund commercial-scale production of its Chaparral autonomous heavy-cargo drone with U.S. manufacturing partner Kratos Defense & Security Solutions.
Chaparral is an advanced vertical takeoff and landing drone designed to carry more than 500 pounds of cargo. The aircraft uses a hybrid-electric powertrain that is intended to provide the reliability of electric propulsion with an extended range of up to 450 miles and no charging infrastructure required.
The drone is designed for defense, rapid response, and commercial logistics. Its multi-mission pods allow rapid reconfiguration across different payload types and customer needs.
Elroy Air said it has a demand pipeline exceeding 1,400 aircraft and more than $5 billion in potential revenue opportunity from logistics and aviation companies including Bristow Group, Barq Group, SLI, and FedEx. The company has also worked on active defense programs with the U.S. Army, U.S. Marine Corps, and U.S. Air Force for more than six years.
Kratos Defense & Security Solutions is the exclusive U.S. manufacturer of Chaparral, with the first production aircraft planned for late 2026. Elroy Air also signed a $200 million joint venture initial agreement with Barq Group to establish an international manufacturing facility in Abu Dhabi serving the MENA region.
Elroy Air and Barq Group plan to begin initial flight operations in the United Arab Emirates in 2027 using U.S.-built aircraft, followed by the start of local production in Abu Dhabi in 2028.
Elroy Air said Chaparral is the only purpose-built heavy-payload uncrewed cargo drone selected for the U.S. Department of Transportation’s eVTOL Integration Pilot Program. The company also completed testing by Japan’s Ground Self-Defense Force, where Chaparral passed all 22 test items for inter-island logistics capabilities.
The business combination is expected to deliver gross proceeds of at least $165 million from the committed PIPE, with up to $230 million in additional proceeds depending on redemptions. Elroy Air plans to use the proceeds to accelerate technology and platform development, ramp deliveries to customers, support strategic acquisitions, and attract technical talent across software and hybrid-electric systems.
The Boards of Directors of Elroy Air and Columbus Circle Capital Corp II have unanimously approved the proposed transaction. The deal is expected to close in the fourth quarter of 2026, subject to regulatory review, shareholder approval, and other customary closing conditions.
Barclays is serving as exclusive financial advisor and exclusive capital markets advisor to Elroy Air. Barclays is also acting as lead placement agent on the PIPE, with Cantor and Cohen & Company Capital Markets also acting as placement agents. Cantor and Cohen & Company Capital Markets are serving as financial and capital markets advisors to Columbus Circle Capital Corp II.
DLA Piper is serving as legal advisor to Elroy Air. White & Case is serving as counsel to Columbus Circle Capital Corp II and Inflection Point. Kirkland & Ellis is serving as legal advisor to the placement agents.
KEY QUOTES:
“As a public company with access to significant capital, Elroy Air will be ideally positioned to meet the rising demand for Chaparral, our heavy-cargo drone. Autonomous flight is the next great logistics revolution — and Elroy Air intends to lead it. The U.S. has made drone dominance a national strategic priority, and that priority is only meaningful if American industry can actually deliver. This transaction ensures we can by rapidly scaling production for U.S. and allied forces and commercial markets alike. I’m excited to partner with Inflection Point, a firm with a track record of successfully scaling high-impact technology companies in order to satisfy significant market demand.”
Andrew Clare, PhD, Chief Executive Officer of Elroy Air
“Elroy Air is emerging at the intersection of two massive secular shifts: the modernization of defense technology and the automation of global supply chains. Through a combination of proprietary autonomous aviation technology and recurring software licensing revenue streams, Elroy has established a highly defensible flywheel across defense and commercial markets. The company’s multi-billion dollar demand pipeline and strategic partnerships with Bristow and Barq underscore the urgency of the market opportunity and Elroy’s growing strategic importance within the industry.”
Michael Blitzer, Chief Investment Officer of Inflection Point
