(Bloomberg) — Sarcos Robotics is planning to go public through a reverse merger with blank-check company Rotor Acquisition Corp.The Salt Lake City-based robot maker and the special purpose acquisition company, or SPAC, will have a combined valuation of $1.3 billion including debt, the company said in a statement on Tuesday, confirming an earlier Bloomberg News report. The deal includes a potential earnout of an additional $281 million based on the performance of the stock after the merger.To help fund the transaction, the companies have raised about $220 million in a private investment in public equity, or PIPE, from investors including BlackRock Inc., Millennium Management, Palantir Technologies Inc., Caterpillar Venture Capital Inc. and Schlumberger, as well as from their own executives.Sarcos develops robotic systems for non-repetitive tasks that are designed to increase productivity among industrial and military workers. Its wearable devices help people move heavy objects with mechanical limbs and support, reducing workplace injuries and allowing employees less capable of strenuous labor to carry out tasks such as lifting airport baggage and manufacturing components without assistance.Led by Chief Executive Officer Ben Wolff, Sarcos will receive as much as $496 million in proceeds from the SPAC transaction, the company said in the statement. Wolff was a co-founder of Clearwire Corp., which was acquired by Sprint Corp. in 2013.The company will lease its exoskeleton, wearable device starting at $100,000 a year, similar to the total cost of hiring a worker for $25 an hour in the U.S., Wolff said in an interview.“Our value proposition is,” he said, “to deliver the productivity of three, four or five workers, depending on the use cases, industry and the job etc.”Initial versions of the devices cost “Hundreds of thousands of dollars” to make, Wolff said. He projects that cost will shrink to $65,000 once Sarcos achieves full-scale production in five years. Currently, the company’s only product in the market is an inspection and surveillance robot, which Wolff said will account for a small portion of its revenue once bigger and more expensive, products are commercialized.Rotor raised $276 million in its initial public offering in January. Its CEO is former Credit Suisse First Boston President Brian Finn, while its chairman is Stefan Selig, a former Bank of America Corp. executive and a U.S. Commerce Department official during the Obama administration.When the combined company’s stock price reaches $15 and $20, there are 1 million shares, representing $280 million, that are structured in an earnout, Selig said.“We did that so everybody is incentivized and aligned to do what we are hoping and expecting to happen here, which is to create significant long-term value,” he said.(Update with interviews with Sarcos and Rotor executives.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.