Crane Harbor Acquisition Corp ( CHAC ) rose Monday after the company announced a merger deal with Xanadu Quantum Technologies to form a dedicated photonic quantum computing firm.

CHAC is poised for potential breakout. See the full story here.

What Happened: Xanadu Quantum Technologies and Crane Harbor have agreed to merge through a newly formed company. Once the deal closes, Xanadu is set to become the first publicly traded company focused solely on photonic quantum computing, with shares expected to trade on both Nasdaq and the Toronto Stock Exchange.

The deal values Xanadu at  a pro forma enterprise value of approximately $3.1 billion and a pro forma market cap of $3.6 billion. The combined company is expected to raise around $225 million from Crane Harbor's trust account, assuming no redemptions, plus another $275 million from strategic and institutional investors through a private share placement at $10.00 each.

More than 90% of the upsized and oversubscribed PIPE capital will be new money and institutional investors, such as AMD, BMO Global Asset Management, CIBC Asset Management, MMCAP Ventures, PlanetFirst and Polar Asset Management Partners. Existing backers like Bessemer, Georgian and OMERS Ventures also participated.

Current Xanadu shareholders and management won't receive cash from the deal — they're rolling all their shares into the new combined company.

“Today marks a transformative milestone for quantum computing as we bring the leading photonic quantum platform to the public markets,” said Christian Weedbrook, CEO of Xanadu. “Our quantum systems compute at true room temperature without cryogenics or laser cooling, while delivering the world’s first networked, modular and scalable quantum computer.”

The transaction has been unanimously approved by the board of directors of both Crane Harbor and Xanadu and is subject to the satisfaction of customary closing conditions, including the approval of the shareholders of each company.

CHAC Price Action: Crane Harbor shares were up 11.96% at $12.49 at the time of publication on Monday. The stock is trading at a new 52-week high, according to Benzinga Pro.

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