Electric vehicle maker Fisker Inc. plans to go public through a merger with a special purpose company backed by private equity firm Apollo Global Management Inc. at a $2.9 billion valuation, the companies said on Monday.
Reuters reported last week that the special purpose acquisition company, Spartan Energy Acquisition Corp., was leading a bidding war among special purpose companies for Fisker.
The proceeds are expected to be used to bring the company's first product, the Fisker Ocean, to production in late 2022.
Spartan's shares were up 7 percent in Monday afternoon trading, but turned south in later trading and closed down 10 percent to $15.06.
SPACs have been behind some of the most high-profile public listings of the last 12 months, including EV startup Nikola Corp., which went public last month, as investors place bets on which startup will be the next Tesla Inc.
Nikola shares are up more than 60 percent since their debut, and Tesla shares have more than quadrupled this year. Chinese electric SUV maker Li Auto last week filed for a U.S. IPO.
The Fisker deal, expected to close in the fourth quarter, will provide Fisker with $1 billion in gross proceeds, including $500 million of funds from existing and new investors such as AllianceBernstein and BlackRock Inc.
Fisker CEO Henrik Fisker, a one-time Aston Martin designer who launched his latest company in Los Angeles in 2016, said he chose Apollo after talking to a number of SPACs because of its strong financial brand, global reach and experienced management.
"We're obviously very excited about getting full financing all the way to start of production," he said in a telephone interview.
Fisker said the startup is in talks with other companies, including Magna International Inc., about building the vehicle. Magna declined to comment. Fisker also is talking with other automakers about using their hardware, including vehicle platforms, motors, battery packs, air conditioning, and other parts, while Fisker focuses on design, software and the consumer digital experience.
"It's really not smart for any EV startup to try and make their own factory," he said. "We're using more the Apple model, where somebody else manufactures their phones."
Fisker also has a memorandum of understanding for Cox Automotive to handle Fisker's vehicle repairs, logistics and warehousing, Fisker said. Cox had no immediate comment.
His previous automotive venture, Fisker Automotive, filed for bankruptcy in 2013 after burning through $1.4 billion in private investments and taxpayer-funded loans.