X Energy Reactor Company, LLC, a developer of small modular nuclear reactors and fuel technology for clean energy generation, and Ares Acquisition Corporation, a publicly-traded special purpose acquisition company, have entered into a definitive business combination agreement, according to a news release.
The combination will establish X-energy as a publicly-traded, developer of a more advanced small modular reactor (SMR) and proprietary fuel that supports the transition to clean, affordable energy through enhanced safety, lower cost, scalability and broader industrial applications. X-energy’s entry into the public markets is expected to accelerate its growth strategy through additional investment opportunities and financial flexibility as well as differentiated sponsorship by Ares, a leading global alternative investment manager.
The business combination ascribes a pre-money equity value of approximately $2bn to X-energy. Existing X-energy equity holders will roll 100% of their existing equity interests into the combined company. In addition, the combined company will receive approximately $1bn of cash held in AAC’s trust account, assuming no redemptions by AAC shareholders.
Institutional and strategic investors have also invested or committed $120m in financing. This includes an invested private round of financing, which comprises $30m from Ares and $45m from OPG and Segra Capital Management, a leading nuclear energy-focused hedge fund, as well as an additional commitment of $45m from Ares to be invested concurrent with the closing of the transaction. X-energy also received approximately $58m of interim financing throughout 2022 from existing strategic investors, including Dow and Curtiss-Wright Corporation.
X-energy is advancing nuclear energy generation through its latest-generation high-temperature gas-cooled reactor, the Xe-100, and its proprietary tri-structural isotropic (TRISO) encapsulated particle fuel, TRISO-X. Representing the next stage in the evolution of nuclear energy technology, the pioneering design of the Xe-100 couples its scalability, innovative modularity, enhanced safety and higher temperature capabilities with decades of HTGR research and operating experience. The Xe-100 can also uniquely address a broader range of uses and applications compared with conventional nuclear reactors. This specifically includes applications that currently rely on fossil fuels to produce steam and heat for processes like manufacturing, petroleum refining and hydrogen production.
The Xe-100 is engineered to operate as a single 80-megawatt (MWe) unit and is optimized as a four-unit plant delivering 320 MWe. With load-following capabilities, the Xe-100 can support intermittent renewable (solar and wind) and other clean energy options with reliable baseload generation.
Guggenheim Securities, LLC is acting as financial advisor and Latham & Watkins LLP is acting as legal advisor to X-energy.
Moelis & Company LLC is acting as financial advisor and Kirkland & Ellis LLP is acting as legal advisor to AAC.
Ocean Tomo, a part of J.S. Held, acted as financial advisor to the Special Committee of the Board of Directors of AAC.
UBS Securities LLC and Citigroup Global Markets Inc. are serving as capital markets advisors to AAC and Ropes & Gray LLP is acting as legal advisor to the capital markets advisors.
