Acquisition of VectoIQ (NASDAQ: VTIQ) announced on Wednesday that its long-awaited merger with electric heavy goods vehicle manufacturer Nikola Motor had been closed, one day after its shareholders approved the transaction.
The agreement provides Nikola with more than $ 700 million in new liquidity, largely from a related transaction “PIPE” (private equity investment) where investors, including Fidelity Investments and hedge fund manager P. Schoenfeld Asset Management, bought shares of the combined company at a reduced price.
Nikola, founded in 2014 by Trevor Milton, has developed a series of Class 8 all-electric trucks (semi-trailers) that have generated considerable interest from the trucking industry as well as from investors. A reason for the interest: Nikola trucks will be offered with the choice of a proprietary high energy density battery or a hydrogen fuel cell. The company has more than 14,000 pre-order reservations for trucks, representing more than $ 10 billion in potential sales.
Nikola plans to start building a factory in Arizona soon, and to produce battery trucks by the end of next year. Fuel cell trucks will follow about two years later after Nikola has built a network of hydrogen refueling stations.
Milton, who has led Nikola since its creation, will remain executive chairman of the combined company. Nikola President Mark Russell will succeed Milton as CEO and VectoIQ CEO Stephen Girsky – formerly Vice President of General Motors (NYSE: GM) – will join its board of directors, the companies said.
The new company will operate under the name of “Nikola Corporation”. Its shares, which more than doubled in value in May as investors rushed to gain positions before the merger, will begin trading under the symbol “NKLA” on Thursday.