Ares Acquisition, X-Energy Reactor announce updates to business combination

X-Energy Reactor and Ares Acquisition Corporation (AAC) announced strategic updates to their previously announced business combination. Ares Management (ARES) has committed to a PIPE investment comprising $50M of convertible preferred stock, or PIPE, in the combined company, and X-energy founder and executive chairman, Kam Ghaffarian, has agreed to contribute approximately $30M to repay certain of X-energy’s outstanding debt and will receive an additional approximately $30M of PIPE shares upon the closing of the transaction. The PIPE investment and contribution are anticipated to close in connection with the completion of the business combination. When combined with Ares’ existing $30M investment funded shortly after the transaction announcement in December 2022, Ares will have invested a total of $80M in X-energy upon the closing of the business combination. Combined with X-energy’s $103M C-2 private financing and cash-in-trust, this additional capital is expected to deliver approximately $534M to the combined company, assuming no redemptions by AAC shareholders in connection with the shareholder vote to approve the business combination. The additional capital will help accelerate the development and deployment of X-energy’s advanced technology. In connection with the Investments, X-energy and AAC have amended the terms of their business combination agreement to revise X-energy’s pre-money equity value to $1.05B from $1.8B.