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Investing.com -- Crane Harbor Acquisition Corp. (NASDAQ:CHAC) stock soared 17% Monday after announcing a definitive business combination agreement with Xanadu Quantum Technologies, a leading photonic quantum computing company. The merger is expected to make Xanadu the first publicly traded pure-play photonic quantum computing company.
The transaction values Xanadu at a pre-money equity value of $3.0 billion, with the combined company expected to have a pro forma enterprise value of approximately $3.1 billion and a market capitalization of $3.6 billion. The deal is expected to generate approximately $500 million in gross proceeds, assuming no redemptions from Crane Harbor’s trust account and including $275 million from a fully committed common equity PIPE at $10.00 per share.
Over 90% of the PIPE capital will come from new strategic and institutional investors, including AMD, BMO Global Asset Management, CIBC Asset Management Inc., MMCAP Ventures, PlanetFirst, and Polar Asset Management Partners, alongside existing investors Bessemer, Georgian, and OMERS Ventures.
Xanadu has established itself as a pioneer in quantum computing, having demonstrated quantum supremacy with its 216-qubit Borealis system in 2022. The company recently launched its Aurora system, which it describes as the first networked, modular, and scalable quantum computer with real-time error correction decoding capability.
Unlike competitors focusing on NISQ-era computers, Xanadu is committed to developing a fully fault-tolerant quantum computer within the next three years. The company projects having up to 100,000 physical qubits and up to 1,000 logical qubits in its fault-tolerant computer by 2029.
Xanadu’s PennyLane open-source software is reportedly used by 47% of quantum programmers worldwide and is integrated across all major quantum hardware providers. The platform is already generating revenue and has partnerships with 143 universities across 33 countries.
Upon closing, shares of the combined company are expected to trade on both the Nasdaq Stock Market and the Toronto Stock Exchange, subject to approval.
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