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Nikola Corp. announced plans to merge with VectoIQ Acquisition Corp., a publicly traded special-purpose acquisition company, to speed up Nikola’s production of zero-emissions commercial vehicles. Upon the closing, the combined company will be named Nikola Corp. and is expected to remain NASDAQ-listed under the new ticker symbol NKLA.
“We are on a roll. You couldn’t ask for better news for the energy and tech industry,” Trevor Milton, founder and CEO of Nikola, said in a release. “The world is transitioning to zero-emissions platforms and Nikola is the leader for heavy-duty vehicles. We believe we have a differentiated business model built on economics, not government subsidies. We now need to double down and speed up the timelines and get to market. We couldn’t be happier to have Steve Girsky join our board.”
Girsky is CEO of VectoIQ and a former vice chairman of General Motors Corp. VectoIQ’s website describes the New York-based company’s mission as “to help partners and clients to develop innovative products and services for the next generation of Smart Transportation.”
Nikola and @VectoIQ, announce a merger that will allow Nikola to become the first publicly-traded hydrogen fuel cell and battery-electric heavy-duty truck manufacturer. VectoIQ stock symbol VTIQ to be changed to NKLA symbol after completion of the merger. https://t.co/GOkfe4n90T— Nikola Motor Company (@nikolamotor) March 3, 2020
The transaction reflects an implied enterprise value at closing of $3.3 billion. Cash proceeds raised in connection with the transaction, which will primarily be used to fund operations, support growth and for other general corporate purposes, will be funded through a combination of VectoIQ’s cash in trust and a $525 million private placement of common stock at $10 per share, led by institutional investors, including Fidelity Management & Research Co., ValueAct Spring Fund and P. Schoenfeld Asset Management.
Nikola has an 800-truck order from Anheuser-Busch. (Nikola Motor Co.)
The transaction proceeds will accelerate production, allow Nikola to break ground on its state-of-the-art manufacturing facility in Coolidge, Ariz., and begin its hydrogen station infrastructure rollout. The company expects to generate revenue by 2021 with the rollout of its battery-electric heavy-duty truck, followed by its fuel cell electric Class 8 sales starting in 2023 and the initial build-out of hydrogen fueling stations to serve Nikola customers’ fleets, such as Anheuser-Busch, according to the Phoenix-based company.
Current Nikola stockholders will remain majority owners of the combined company at closing.
The boards of directors of both VectoIQ and Nikola have unanimously approved the proposed transaction. Completion of the proposed transaction is subject to approval of VectoIQ and Nikola stockholders and other customary closing conditions, including a registration statement being declared effective by the Securities and Exchange Commission, and is expected to be completed in the second quarter of 2020.
Once approved, Milton will serve as executive chairman of the combined company, continuing to lead the vision and forward-looking strategy. Mark Russell will serve as the CEO of Nikola. He joined Nikola as president in 2019 and previously served as chief operating officer of Worthington Industries, a publicly listed metals manufacturing company. Kim Brady will remain as Nikola’s chief financial officer.
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