Electric vehicle start-up Fisker is expected to go public through a merger with a company backed by private equity firm Apollo Global Management with a combined value of $2.9 billion, the companies said Monday.
The aspiring California-based automaker will merge with Spartan Energy Acquisition, a special purpose acquisition firm. The deal is expected to close in the fourth quarter, officials said.
Spartan Energy opened Monday at more than $20 a share, but then gave up those early gains. Recently the stock was up more than 2.5%, in heavy volume.
The deal mirrors that of all-electric vehicle start-up Nikola, which went public last month through a reverse merger with VectoIQ, another publicly traded special purpose acquisition company.
The proposed deal is anticipated to provide Fisker with the necessary funding to bring its first product, the Fisker Ocean, to production in late 2022.
Henrik Fisker, founder, chairman and CEO of Fisker told CNBC that the deal was the "best way" to get to the vehicle to production. He said the company will not need to raise any additional capital to launch the product.
"I think this is the only way forward," he said Monday on CNBC's "Squawk on the Street."
The company, according to Fisker, plans to share hardware of the vehicle with other automakers. He declined to discuss where the vehicle will be produced, saying Fisker does not plan to build its own plant.
Fisker, a well-known auto designer, has been promising to bring a new all-electric vehicle to market for several years. He first promised a luxury sedan to rival the Tesla Model S before switching gears to the Ocean, a mainstream crossover. The sedan, according to the company's website, remains in its plans but there's no set launch date.
Fisker is credited with designing the BMW Z8 and Aston Martin DB9. He previously launched a company with the same name that brought a plug-in hybrid vehicle to market called the Karma. The company went bankrupt in 2013. Wanxiang Group, a Chinese firm, purchased the company's assets but Fisker retained the company's name.
Cowen, Credit Suisse and Goldman Sachs are serving as co-placement agents on the private investment in public equity offering.