Electric vehicle manufacturer Nikola Corp. has plans to go public and merge with a publicly traded special purpose acquisition company. Hedge fund ValueAct and Fidelity both back the SPAC.

According to reports, the firm will engage in a reverse merger with VectoIQ Acquisition Corp. (NASDAQ: VTIQ). The new company will trade under the name Nikola Corp. and carry a valuation of $3.3 billion.

Nikola Corp. Reverse Merger

VectorIQ will fund the deal with cash in a trust. It will also have a private placement worth $525 million in common stock. Shares will initially trade for $10.00.

The private placement is being handled by groups like Fidelity Management & Research Company and ValueAct Spring Fund.

SPACs have become a popular strategy to bring a company public. In February, SPAC Far Point Global Acquisition Corp. (NYSE: FPAC) obtained Global Blue in a deal worth $2.6 billion. Last July, Virgin Galactic (NYSE: SPCE) went public through a merger with Social Capital Hedosophia Holdings Corp.

Meanwhile, ValueAct made a big bet on Nikola Motor in 2019. The firm produces hydrogen fuel cell technology to fuel vehicles. ValueAct invested roughly $30 million to $40 million prior to the firm’s large capital raise last summer. ValueAct’s Jeff Ubben further believes that these technologies will produce the next wave of profits and sustainability in the future.

“This idea of a really, truly sustainable business that delivers savings today and has a tremendous social and environmental benefit is the next Facebook,” Ubben said in an interview last summer. “These are the next mega-plays.”

Related: Private Equity: TPG to Launch Strategic Capital Fund