X Energy to Merge with SPAC AAC Holdings (AAC)

December 6, 2022 6:47 AM EST

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X Energy Reactor Company, LLC, a leading developer of small modular nuclear reactors and fuel technology for clean energy generation, and Ares Acquisition Corporation (NYSE: AAC) (“AAC”), a publicly-traded special purpose acquisition company, announced today that they have entered into a definitive business combination agreement.

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 Management Corporation (NYSE: ARES) (“Ares”), a leading global alternative investment manager.

A Leading Developer of Advanced SMR and Fuel Technology

X-energy is advancing nuclear energy generation through its latest-generation high-temperature gas-cooled reactor (“HTGR”), 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.

The reactors are fueled by X-energy’s TRISO-X fuel, both of which are designed to be intrinsically safe. TRISO fuel has a more than 40-year demonstrated track record through prototype and full-scale reactors and has been called “the most robust nuclear fuel on earth” by the U.S. Department of Energy. By developing the proprietary TRISO-X fuel, X-energy has further enhanced the safety of the product and can ensure steadier supply and greater quality control.

In addition to its reactors and fuel, X-energy intends to provide a full suite of value-added services, including project planning, regulatory support, assembly and construction coordination, procurement support, and long-term maintenance and operations services during the lifetime of its reactors.

Key Investment Highlights

  • Advanced Modular Technology: The Xe-100’s radically simplified modular design is road-shippable and intended to drive scalability, accelerate construction timelines and create more predictable and manageable construction costs.
  • Intrinsically Safe Design: TRISO-X fuel is designed to be intrinsically safe under the most adverse conditions by acting as its own waste containment vessel. In addition, X-energy expects that an Xe-100 four-reactor plant will require significantly less land area for its entire site-bounded emergency planning zone compared to typical large-scale nuclear facilities.
  • Broader Applications for Decarbonization: Unlike existing nuclear reactors and many under-development competitor alternatives, X-energy’s HTGR technology can support broad industrial use applications through its high-temperature heat and steam output. In addition, it can integrate into and address the needs of both large and regional electricity systems through more efficient load ramping – down to or up from 40% power in 12 minutes.
  • Significant Serviceable Addressable Market (“SAM”) for Advanced Nuclear: In the U.S., Canada and the U.K. alone, 67 gigawatts of capacity from SMRs will need to be installed by 2040 to offset the retirement of existing coal and fossil fuel facilities and meet expected growth in energy demand. This represents a potential revenue opportunity of approximately $500 billion for X-energy by 2040, which is expected to increase to approximately $1.0 trillion by 2050. The Xe-100’s versatility expands the addressable market beyond power generation to also include industrial heat and other important decarbonization applications.
  • Attractive Business Model: X-energy’s CapEx-light, services-driven business model includes technology licensing, fuel sales and long-term recurring service offerings and is expected to generate consistent and recurring revenue, strong operating margins and robust free cash flow.
  • Experienced and Innovative Team: X-energy is led by a forward-thinking team with an average of more than 25 years of experience in the nuclear and/or energy sectors. X-energy’s management team has deep capabilities in design, operations, government relations and public markets and is supported by more than 120 team members with advanced degrees in engineering and science.

A Strong, Prospective Customer Pipeline and Significant Bi-Partisan Support

X-energy’s prospective customer pipeline includes approximately 30 potential unique customers across a variety of use cases and geographies covering the North America and Europe. Key examples include:

  • Ontario Power Generation Inc. (“OPG”), one of North America’s largest clean power producers. Framework agreement signed in July 2022 to pursue opportunities to deploy Xe-100 advanced reactors in Ontario at industrial sites and identify further potential end users and sites throughout Canada.
  • Dow. Letter of intent signed in August 2022 to build the Xe-100 and provide cost-competitive, carbon-free process heat and power to a Dow facility on the Gulf Coast. This is the first time an industrial manufacturer has announced its intention to deploy SMRs in its operations.
  • Grant County Public Utility District (WA) and Energy Northwest. Memorandum of understanding signed in April 2021 to support the development and commercial demonstration of the first advanced nuclear reactor in the U.S.

Underpinning this demand is a supportive regulatory backdrop in the U.S., where there is strong bi-partisan support for nuclear power. In 2020, X-energy was selected by the U.S. Department of Energy to receive $1.2 billion in federal funding as part of the Advanced Reactor Demonstration Program. The funding is intended to provide significant financial support for the delivery of a first-of-a-kind commercial advanced nuclear plant and TRISO-X fuel fabrication facility. In 2022, the Inflation Reduction Act and Infrastructure Investment and Jobs Act allocated hundreds of billions of dollars to the clean energy sector, with the former providing tax credits of up to 50% of initial capital costs for advanced nuclear reactors.

Leadership Commentary

“We founded X-energy in 2009 because the world needs energy solutions that are clean, safe, secure and affordable,” said Kam Ghaffarian, Ph. D., Founder and Executive Chairman of X-energy. “Since then, it has become even more evident that nuclear energy is the only viable technology that can provide the reliable, zero-carbon power generation critical to advancing the energy transition. We are thrilled to have the support of Ares, which we believe will accelerate X-energy’s ability to deliver among the most advanced nuclear technology to benefit communities around the world.”

“We see a significant addressable market opportunity given the rapidly growing demand to accelerate the decarbonization of power and provide greater energy security,” said J. Clay Sell, Chief Executive Officer of X-energy. “We have assembled a world-class team that shares a deep passion for our work, and we believe X-energy’s technology is distinctly positioned to support the delivery of nuclear energy at scale to meet the needs of customers, consumers and businesses globally. 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.”

“Ares and X-energy share a strong commitment to driving the transition to a lower-carbon economy through innovation in climate infrastructure,” said David Kaplan, Co-Chairman and Chief Executive Officer of AAC, Co-Founder of Ares and Co-Chairman of the Ares Private Equity Group. “As an early mover in developing proprietary nuclear technology and backed by an attractive business model and veteran leadership team, we believe that X-energy is well-positioned to become a leader in the global clean energy generation market. We look forward to contributing Ares’ significant investment and value creation experience, global ESG 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 Overview

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. This includes an invested private round of financing, which comprises $30 million from Ares and $45 million from OPG and Segra Capital Management, a leading nuclear energy-focused hedge fund, as well as an additional commitment of $45 million from Ares to be invested concurrent with the closing of the transaction. X-energy also received approximately $58 million of interim financing throughout 2022 from existing strategic investors, including Dow and Curtiss-Wright Corporation. Immediately following the consummation of the transaction and assuming none of AAC’s existing shareholders exercise their redemption rights, X-energy’s existing equity holders are expected to hold over 60% of the issued and outstanding shares of common stock of the combined company.

The Board of Directors of AAC and the Board of Directors of X-energy have both unanimously approved the proposed transaction. The proposed transaction has also been approved by the requisite members of X-Energy. Completion of the transaction is subject to customary closing conditions, including the approval of the AAC shareholders and the receipt of certain governmental and regulatory approvals. The transaction is expected to be completed in the second quarter of 2023.

Upon the closing of the transaction, the combined company will be named X-Energy, Inc., and its common equity securities and warrants will be listed on the New York Stock Exchange.

For a summary of the material terms of the transaction, as well as a copy of the business combination agreement and supplemental investor presentation, please see the Current Report on Form 8-K to be filed by AAC with the U.S. Securities and Exchange Commission (the “SEC”) available at, on AAC’s website at and on X-energy’s website at Additional information about the proposed transaction will be described in the registration statement relating to the transaction, which AAC will file with the SEC.


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.

Investor Conference Call

X-energy and AAC will host a joint investor conference call to discuss the business combination and the proposed transaction today, December 6, 2022 at 8:30 AM ET.

To listen to the conference call via telephone dial 1-877-407-9208 (U.S.) or 1-201-493-6784 (international) and enter the conference ID number 13734640. To listen to the webcast, please click here. A telephone replay will be available until Thursday December 20, 2022 at 1-844-512-2921 using the conference ID number 13734640.

For Investor Relations, including a copy of the presentation as filed with the SEC, please visit the X-energy website at, or the AAC website at or the SEC’s website at

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