(Reuters) - Li-Cycle Corp, a recycler of lithium-ion batteries, is nearing a deal to go public through a merger with blank-check acquisition company Peridot Acquisition Corp at a valuation of about $1.7 billion, according to people familiar with the matter. The deal could be announced as early as Tuesday, the sources said, requesting anonymity ahead of an official announcement. It represents a bet on the growing market for recycling used batteries, as well on the rising demand for lithium-ion power sources for new technologies such as electric vehicles. Founded in Toronto in 2016, Li-Cycle recycles end-of-life lithium-ion batteries that power products such as electric cars, medical equipment and smartphones. Its investors include Moore Strategic Ventures and CC Industries. The volume of end-of-life batteries is expected to reach 1.2 million tons in 2025 and 3.5 million tons in 2030, according to market research firm IHS Markit. Peridot is a special purpose acquisition company (SPAC) led by investment firm Carnelian Energy Capital Management. It raised $300 million in an initial public offering (IPO) on the New York Stock Exchange in September. A SPAC is a shell company that raises money in an IPO to merge with a privately held company that then becomes publicly traded as a result. SPACs have emerged as a popular IPO alternative for companies, providing a path to going public with less regulatory scrutiny and more certainty over the valuation that will be attained and funds that will be raised.