Archer Aviation is acquiring three Boeing subsidiaries focused on autonomous aircraft, airspace management and unmanned systems, a deal that will significantly expand the electric aircraft maker’s business into defense and add more than $200 million in annual revenue.

The companies announced the deal Monday, saying Archer will acquire Wisk Aero, SkyGrid and Insitu. The transaction is expected to close by the end of 2026, subject to regulatory and other closing conditions.

The deal brings together Archer’s work on electric vertical takeoff and landing aircraft, unmanned aircraft and artificial intelligence with Boeing’s investments in autonomous flight and defense technologies.

The transaction represents a major expansion by Archer beyond its core effort to develop electric air taxis. The company said the three Boeing businesses operate across 35 countries and collectively have nearly two million flight hours.

Bingen, Wash.-based Insitu, which develops and manufactures uncrewed aircraft systems for intelligence, surveillance and reconnaissance, is the largest piece of the acquisition from a defense perspective. The profitable unit has manufactured and deployed more than 3,500 unmanned aircraft and supports military customers in 35 countries, according to the companies. Founded in 1994, Insitu was acquired by Boeing in 2008 for about $400 million.

Insitu’s portfolio includes small unmanned aircraft systems, vertical-takeoff-and-landing capabilities and software designed to support military intelligence and surveillance operations. It has offices in the U.S., Australia, the U.K. and the United Arab Emirates.

Mountain View, Calif.-based Wisk was formed in 2019 as a joint venture between Boeing and Kitty Hawk Corp. and has since developed autonomous electric aircraft. The company — which raised $450 million from Boeing in 2022 — has designed, built and flown six generations of its eVTOL air taxi systems and conducted more than 1,700 flight tests.

Austin, Texas-based SkyGrid provides software for managing increasingly automated airspace, including systems designed to coordinate aircraft and integrate autonomous vehicles into the broader aviation system.

Archer said it plans to combine those capabilities with its own artificial intelligence platform, known as ZEE, which the company describes as a foundation model for aerospace and defense applications.

“This is a watershed moment for Archer and the future of physical AI in aerospace and defense,” Archer founder and CEO Adam Goldstein said in a statement. “This is the next big step forward in becoming a diversified platform, rapidly growing our revenue base and bringing scale to our business.”

The transaction also creates a new strategic relationship between Archer and Boeing.

As part of the deal, Boeing will take a stake in Archer and enter into a collaboration and technology-sharing agreement with the company. Boeing will receive class A shares in Archer worth approximately 19.75%. After the transaction closes, Boeing’s shares will amount to a roughly 16.5% ownership stake in Archer, according to The New York Times.

It will also retain access to Wisk’s core autonomous flight technology for use in its current and future commercial and defense aircraft.

“This transaction is a win-win for Boeing and Archer,” Brian Yutko, Boeing’s vice president of Commercial Airplanes Product Development, said in a statement. “It allows Wisk, SkyGrid and Insitu to accelerate capability development and time to market while ensuring Boeing capitalizes on its investments in these technologies over the past two decades through continued development in our core businesses.”

For Boeing, the transaction provides a way to retain exposure to the technologies while shifting the three businesses into Archer, where they can be combined with its aircraft and AI efforts.

Archer, based in Silicon Valley, is developing its Midnight electric air taxi which it touts as a “new way to move through cities.” Monday’s deals also increasingly expand Archer’s focus to defense applications and other aircraft technologies.

Shares of Archer soared in Monday trading, up more than 7 percent.