Announcement • Nov 01
X Energy Reactor Company, LLC cancelled the acquisition of Ares Acquisition Corporation (NYSE:AAC) from a group of shareholders in a reverse merger transaction.
X Energy Reactor Company, LLC enter into a letter of intent to acquire Ares Acquisition Corporation (NYSE:AAC) from a group of shareholders in a reverse merger transaction on September 27, 2022. X Energy Reactor Company, LLC entered into a definitive business combination agreement to acquire Ares Acquisition Corporation (NYSE:AAC) from a group of shareholders for $2.2 billion in a reverse merger transaction on December 5, 2022. In addition, up to 25,000,000 Earn Out Units will be issued as consideration. X-energy’s existing security holders are rolling over 100% of their equity and are expected to hold over 60% of the combined company, subject to redemptions by AAC’s existing stockholders. 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. On June 11, 2023, X Energy Reactor Company and Ares Acquisition entered into the First Amendment to the agreement. Under the amended terms, X-energy’s pre-money equity value has been revised to $1.8 billion from approximately $2.1 billion. The earnout provisions applicable to the X-energy members to increase the number of unvested earn out units granted to the Members from 25,000,000 to 52,500,000. On September 12, 2023, Ares Acquisition Corporation and X-Energy Reactor Company, LLC entered into the Second Amendment to Business Combination Agreement. Pursuant to the Second Amendment, AAC and X-energy have agreed to, among other things, amend the definition of “Base Purchase Price” to decrease the pre-transaction equity value given to X-energy from $1.8 billion to $1.05 billion.
The transaction is subject to; the receipt of certain governmental and regulatory approvals; the adoption or approval, as applicable, by AAC’s shareholders; any applicable waiting period or any extension of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 in respect of the Business Combination being expired or earlier terminated, as applicable; the Registration Statement becoming effective; conditional approval of the listing of the New X-energy Class A Common Stock on the NYSE, subject to satisfaction of the round lot holders requirement for initial listing; the Domestication will have been completed; the recapitalization will have been completed whereby all outstanding equity securities of X-energy, including X-energy’s existing Class A common units, Series A preferred units and Series B preferred units, will be converted or exchanged into common units and AAC Closing Cash being no less than an amount equal to $120,000,000 minus the aggregate amounts actually funded in connection with one or more capital raising transactions entered into on or after the Signing Date and prior to January 15, 2023 on substantially the same terms as the Funded Permitted Financing and other closing conditions. The board of directors of AAC and the Special Committee have unanimously approved the Business Combination and unanimously recommend that shareholders vote for the transaction. The proposed transaction has also been approved by the requisite members of X-Energy. On January 18, 2023, AAC announced that the extraordinary general meeting originally scheduled for January 24, 2023 is being postponed to February 2, 2023. On February 2, 2023, AAC shareholders approved the Extension Amendment Proposal to extend the date by which the Company has to consummate a business combination from February 4, 2023 to August 4, 2023. The transaction is expected to be completed in the second quarter of 2023. All the proceeds from the transaction (after transaction costs) are expected to be held as cash on the balance sheet and will be used to complete design & licensing of the Xe-100 and construction of the Fuel Fabrication Facility. As of August 1, 2023, Ares Acquisition Corporation announced its shareholders approved a further extension of the period of time that the Company has to consummate its proposed business combination to November 6, 2023. At the extraordinary general meeting of the Company, holders of 1,392,821 of the Company’s Class A ordinary shares exercised their right to redeem their shares for a pro rata portion of the funds in the Company’s trust account in connection with the announcement of the second extension, reflecting redemptions of approximately 3.0% of the total Class A ordinary shares outstanding. As a result, approximately $482,395,329.56 will remain in the Company’s trust account. October 16, 2023, Ares Acquisition announced that on October 13, 2023, the U.S. Securities and Exchange Commission declared effective the Registration Statement on Form S-4. Following the redemption, the Company’s remaining number of issued and outstanding Class A ordinary shares was 45,604,260. The transaction is expected to be completed in the fourth quarter of 2023.
Guggenheim Securities, LLC is acting as financial advisor and Paul Sheridan, Rachel Sheridan, Nicholas P. Luongo, Tim Fenn, Jared Grimley and Michelle Carpenter of Latham & Watkins LLP acting as legal advisors to X-energy. Moelis & Company LLC is acting as financial advisor and Monica J. Shilling, Dov Kogen, Philippa Bond, Thomas Felix, Anne Kim, Liam Murphy and Andrew Stuyvenberg of Kirkland & Ellis LLP acting as legal advisors and due diligence providers to AAC. Richard Donohoe, Noor Al-Banna and Greg Campanella of Ocean Tomo, LLC, a part of J.S. Held, acted as independent financial advisor and fairness opinion provider 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 Paul Tropp and Paul Kellogg of Ropes & Gray LLP are acting as legal advisor to the capital markets advisors. Continental Stock Transfer & Trust Company acted as transfer agent and Morrow Sodali LLC acted as proxy solicitor to AAC for a fee of $30,000, plus disbursements. In connection with providing the First Fairness Opinion, the Second Fairness Opinion and the Third Fairness Opinion, AAC agreed to pay Ocean Tomo a fee of $520,000.
X Energy Reactor Company, LLC cancelled the acquisition of Ares Acquisition Corporation (NYSE:AAC) from a group of shareholders in a reverse merger transaction on October 31, 2023.
