Nikola finds a new strategic partner, will be listed on NASDAQ and get more funds for business development.
Nikola Corporation, which develops electric and hydrogen fuel cell vehicles, announced a surprising definitive agreement to merge with VectoIQ Acquisition Corp., described as “a publicly-traded special purpose acquisition company”.
Once completed, the combined $3.3 billion company will be named Nikola Corporation and is expected to remain NASDAQ-listed under the new ticker symbol “NKLA” (VectoIQ was already listed on NASDAQ as VTIQ). The area of interest will remain similar: “the development of next generation smart transportation”.
The deal includes also a $525 million private placement of common stock so the new entity will have a surplus of cash:
“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 $10.00 per share led by institutional investors including Fidelity Management & Research Company, ValueAct Spring Fund and P. Schoenfeld Asset Management LP. Current Nikola stockholders will remain majority owners of the combined company at closing.”
Nikola Corporation boasts that so far it collected more than 14,000 pre-orders for its trucks, which represents more than $10 billion in potential revenue and two-and-a-half years of production.
The company hopes to generate first revenues from selling all-electric vehicles by 2021, and from selling hydrogen fuel cell vehicles in 2023.
“Nikola is a global leader in zero emissions heavy duty trucks and hydrogen infrastructure. More than $10 billion in pre-order leases to date and the joint venture with European industrial vehicle manufacturer IVECO make Nikola a formidable competitor to other OEMs (original equipment manufacturers). Nikola’s business model uniquely supplies both the truck and hydrogen fueling infrastructure, solving the fleets’ concerns of where to refuel with green hydrogen at competitive pricing to diesel. The transaction proceeds will accelerate production, allow Nikola to break ground on its state-of-the-art manufacturing facility in Coolidge, Arizona, and begin its hydrogen station infrastructure roll out. The company expects to generate revenue by 2021 with the roll out of its BEV truck, followed by FCEV truck sales starting in 2023 and the initial build out of hydrogen fueling stations to serve Nikola customers’ fleets, such as Anheuser-Busch.”
Trevor Milton, Founder and CEO of Nikola stated:
“We are on a roll. You couldn’t ask for better news for the energy and tech industry. The world is transitioning to zero emission 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.”
Stephen Girsky, CEO of VectoIQ and former Vice Chairman of General Motors Corporation said:
“In our two-year quest to find a partner that was a proven technology leader and focused on making a global difference, Nikola was the clear winner. Nikola’s vision of a zero-emission future and ability to execute were key drivers in our decision.”
We saw also that CNH Industrial (owner of the IVECO truck manufacturer and the FPT Industrial powertrain brand), which invested in Nikola some $250 million, fully supports the Nikola Corporation NASDAQ listing.
Hubertus Mühlhäuser, Chief Executive Officer, CNH Industrial said:
“This is exciting news and another key milestone for our joint project to deliver zero emission Heavy-Duty Trucks and hydrogen infrastructure through a unique business model. Nikola’s NASDAQ listing gives further impetus to the ambitious targets we have set ourselves, to be at the forefront of scalable clean technology investments transforming our businesses and environment alike,”.
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