X-energy to become publicly traded company

December 12, 2022, 7:00AMANS Nuclear Cafe

X-energy, a developer of small modular reactors and nuclear fuel technology, has entered into a definitive business combination agreement with Ares Acquisition Corporation (AAC). As a result of the agreement, X-energy will become a publicly traded company, a status that is expected to boost its growth strategy, investment opportunities, and financial flexibility. In addition, X-energy will receive differentiated sponsorship by Ares Management Corporation, which describes itself as a “leading global alternative investment manager.” The transaction is expected to be finalized in the second quarter of 2023.

Clean energy: Both parties to the agreement emphasized their engagement in investing in clean, safe, secure, and affordable energy. J. Clay Sell, X-energy’s chief executive officer, said about his company, “We see a significant addressable market opportunity given the rapidly growing demand to accelerate the decarbonization of power and provide greater energy security. . . . The commitments from Ares and our commercial partners reflect their confidence in our business and our team. I appreciate their continued collaboration to help us achieve our objectives.”

David Kaplan, CEO of AAC, said, “Ares and X-energy share a strong commitment to driving the transition to a lower-carbon economy through innovation in climate infrastructure. . . . We look forward to contributing Ares’ significant investment and value creation experience, global ESG [environmental, social, and governance] focus and deep understanding of the public markets to support X-energy’s vision to deliver a positive impact and long-term value creation.”

Transaction details: According to Businesswire, “The business combination ascribes a pre-money equity value of approximately $2.0 billion 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 $1 billion of cash held in AAC’s trust account, assuming no redemptions by AAC shareholders. Institutional and strategic investors have also invested or committed $120 million in financing.” The existing equity holders of X-energy are expected to have more than 60 percent of the issued and outstanding shares of the common stock of the combined company.

Additional details of the transaction can be found on the AAC and X-energy websites.

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