Ares Acquisition Corp. III · NYSE:AAC
Ares Acquisition Corp. III — Ares Acquisition — SPAC Merger (June 2023)
60 slides from Ares Acquisition Corp. III's SPAC merger presentation, Jun 28, 2023
Slide 1: Clean • Safe • Secure • Affordable
Exhibit 99.1 Clean • Safe • Secure • Affordable © 2023 X-Energy Reactor Company, LLC, all rights reserved
Slide 2: Disclaimer
Disclaimer This presentation (the “presentation”) is being delivered to you by X-Energy Reactor Company, LLC (“X-energy”) and Ares Acquisition Corporation (“AAC”) to assist interested parties in making their own evaluation with respect to a potential business combination of X-energy and AAC and rela
Slide 3: Today's Agenda
Today’s Agenda 01 Introductions & History 10:00AM – 10:15AM J. Clay Sell, Chief Executive Officer 02 Ares Investment Thesis 10:15AM – 10:25AM Allyson Satin, AAC Chief Operating Officer 03 Market Opportunity 10:25AM – 10:35AM J. Clay Sell, Chief Executive Officer 04 Xe-100 Reactor Overview 10:35AM –
Slide 4: Introductions & History
Introductions & History 01 – J. Clay Sell, Chief Executive Officer
Slide 5: Two Challenges in Nuclear: Energy Demand and Carbon Emissions
Two Challenges in Nuclear is the only energy source for Opposition reliability and decarbonization “Always-on” baseload Global Energy Need to drastically energy Demand Up Reduce Carbon 50% by 2050(1) Emissions Generates zero carbon emissions Fossil fuels currently Can be flexibly located near supply
Slide 6: Energy for the Future
Energy for the Future “ I founded X-energy because the world needs energy solutions that are clean, safe, secure, and affordable. With so much at stake, we cannot continue down the same path.” – Kam Ghaffarian, Founder Steam Turbines Nuclear Islands Expected EPZ Digital rendering of a Xe-100 4-pack
Slide 7: X-energy at a Glance
Energy for the Future “ I founded X-energy because the world needs energy solutions that are clean, safe, secure, and affordable. With so much at stake, we cannot continue down the same path.” – Kam Ghaffarian, Founder Steam Turbines Nuclear Islands Expected EPZ Digital rendering of a Xe-100 4-pack
Slide 8: X-energy at a Glance
Energy for the Future “ I founded X-energy because the world needs energy solutions that are clean, safe, secure, and affordable. With so much at stake, we cannot continue down the same path.” – Kam Ghaffarian, Founder Steam Turbines Nuclear Islands Expected EPZ Digital rendering of a Xe-100 4-pack
Slide 9: X-energy at a Glance
Energy for the Future “ I founded X-energy because the world needs energy solutions that are clean, safe, secure, and affordable. With so much at stake, we cannot continue down the same path.” – Kam Ghaffarian, Founder Steam Turbines Nuclear Islands Expected EPZ Digital rendering of a Xe-100 4-pack
Slide 10: X-energy and Dow Partner to Decarbonize Industrial Processes
X-energy and Dow Partner to Decarbonize Industrial Processes On March 1, 2023, Dow and X-energy announced their entry into an agreement to build the Xe-100 under the ARDP Dow and X-energy have signed a joint development agreement (“JDA”) and on May 11 announced that they intend to deliver the first
Slide 11: Leadership Team: Deep Nuclear Roots, Technical & Business Pedigrees
Leadership Team: Deep Nuclear Roots, Technical & Business Pedigrees Average 25+ Years of Nuclear / Energy Experience with Specialty in Design, Operations, Government Relations and Public Markets Key Leadership Team Dr. Kam Ghaffarian Steve Miller J. Clay Sell Harlan Bowers Senior Vice President & Ex
Slide 12: Key Investment Highlights
Key Investment Highlights Powerful Significant total addressable market (“TAM”) for advanced nuclear – a carbon-free, always-on generation Tailwinds in source capable of addressing the global need for clean energy Clean Energy Safe, Simplified and designed to be meltdown proof, the Xe-100 drives enh
Slide 13: Ares Investment Thesis
Ares Investment Thesis 02 – Allyson Satin, AAC Chief Operating Officer
Slide 14: Ares is a Compelling SPAC Partner for X-energy
Ares is a Compelling SPAC Partner for X-energy Leading Partnership with Ares Acquisition Corporation Ares’ Sponsorship and Deep Infrastructure Investing Experience(1) >10 IPOs ~3,000 Portfolio ~1,960 Companies Institutional Ares has successfully brought Deep executive network and Relationships over
Slide 15: X-energy & Ares – A Differentiated Partnership
X-energy & Ares – A Differentiated Partnership Compelling Tailwinds in Clean Energy Advanced nuclear is a key component of the clean energy transition and energy security investment themes given its ability to decarbonize power and industrial end markets and provide reliable and continuous operation
Slide 16: Market Opportunity
Market Opportunity 03 – J. Clay Sell, Chief Executive Officer
Slide 17: Global Macro Themes Drive Support for Nuclear
Global Macro Themes Drive Support for Nuclear Net-zero targets require substantial build-out of clean, firm(1) generation resources that can reach many sectors of the economy Nuclear Can Support Decarbonization Beyond Electric Power(2) Estimated Capacity Additions Required to Achieve Net-Zero in the
Slide 18: Clean Energy Transition Drives Market Opportunity
Clean Energy Transition Drives Market Opportunity X-energy is well positioned to address the potential ~200 GW market for SMRs in the United States DOE Modeling Scenarios of Advanced Nuclear Capacity by 2050 (GW)(1) Est. FOAK to NOAK LCOE Ranges of Clean, Firm Resources ($/MWh) FOAK High Infrastruct
Slide 19: Support for Nuclear Continues to Gain Momentum
Support for Nuclear Continues to Gain Momentum Majority of states either already have nuclear facilities or are supportive of adopting SMR development Montana – Passed Washington – Enacted legislation to ease state Indiana – Passed state Clean Energy Nebraska – State bill West Virginia – Governor Ju
Slide 20: Policymakers Recognize the Importance of Nuclear
Policymakers Recognize the Importance of Nuclear to Address the Global Need for Clean Power United States International I have long supported the It can’t be done with wind and Nuclear is the only form of reliable, low carbon electricity generation which commercialization of advanced solar alone. We
Slide 21: Inflation Reduction Act Increases U.S. Government Support for Advanced Nuclear
Inflation Reduction Act Represents a Significant Increase in U.S. Government Support for the Advanced Nuclear Industry New U.S. government support will meaningfully accelerate the deployment of advanced nuclear reactors U.S. Government Funding for Advanced Nuclear ($ in millions) Investment tax cred
Slide 22: IRA Provides Significant Support for SMR Deployment
IRA Provides Significant Support for SMR Deployment Up to $880mm in tax credits per 4-pack reactor enhances SMR economics for customers Clean Electricity Production Tax Credit(1) (§ 45Y) Clean Electricity Investment Tax Credit(2) (§ 48E) Up to ~60 cents per dollar of construction costs, assuming a 2
Slide 23: Xe-100 Reactor Overview
Xe-100 Reactor Overview 04 – Dr. Martin van Staden, Vice President, Reactor Development
Slide 24: Xe-100 – A Pioneering Gen IV Nuclear Reactor
Xe-100 – A Pioneering Gen IV Nuclear Reactor 80 MWe modular design & manufactured components designed to drive scalability, accelerated timeline and cost control Xe-100 Schematic • Each reactor module is connected to its own steam turbine Nuclear generator or process heat offtake, so modules can be
Slide 25: Thermal Output Well Positioned to Satisfy Most Industrial Applications
X-energy’s Thermal Output is Well Positioned to Satisfy Most Industrial Applications Steam Output Temperature 100 °C 200 °C 300 °C 400 °C 500 °C 600 °C 700 °C 800 °C 900 °C 1,000 °C HTSE and Thermo-Chemical Hydrogen Production 800-1,000°C Coal Gasification Hydrogen Steam Reforming 500-900°C Biomass
Slide 26: X-energy & Gen IV SMRs are Key to the Energy Transition
X-energy & Gen IV SMRs are Key to the Energy Transition X-energy’s solution will outperform other energy sources on key criteria essential to decarbonization Traditional SMRs(1) Renewables Large-Scale Gen III+ / Gen IV Fossil Fuels (Solar & Wind) Nuclear Carbon-Free  ✓ ✓ ✓ ✓ Power Reliable Baselo
Slide 27: SMRs are Attractive Compared to Conventional Nuclear
SMRs are Attractive Compared to Conventional Nuclear SMRs’ lower capital costs, simplified operations and improved safety profile are a significant improvement over conventional nuclear (2) Xe-100 Conventional Nuclear(1) Site-Bounded Emergency Planning Zone (“EPZ”) 320 MWe 4-Pack ~1,150 MWe Power po
Slide 28: X-energy is Advancing Nuclear Energy
X-energy is Advancing Nuclear Energy Modular design and off-the-shelf Carbon-free, always-on generation components designed to drive source capable of addressing the scalability, accelerated timelines global need for clean energy and ability to manage construction cost – revolutionizing the construc
Slide 29: TRISO-X Fuel Overview
TRISO-X Fuel Overview 05 – Dr. Pete Pappano, President, TRISO-X
Slide 30: TRISO-X Fuel – Proven Safety Approach
TRISO-X Fuel – Proven Safety Approach Proven Safety Track Record A More Stable and Efficient Fuel • TRISO Fuel was first developed in the United States and United Kingdom in the 1960s with uranium dioxide fuel and full-scale demonstration X-energy produced TRISO-X Particle cut away to show layers s
Slide 31: TRISO-X Fuel – Intrinsic Safety
TRISO-X Fuel – Intrinsic Safety The Department of Energy describes TRISO fuel as “the most robust nuclear fuel on Earth”(1) It retains waste and fission products within the fuel during all foreseeable adverse conditions, even worst-case accidents, and it is designed not to melt • X-energy manufactur
Slide 32: Fuel Facility Construction Progress
Fuel Facility Construction Progress Proven Fuel Demonstration Facility Construction of Fuel Facility X-energy TRISO-X Fuel Fabrication Pilot Facility at Oak Ridge National Laboratory Groundbreaking for X-energy’s TRISO-X facility in Oak Ridge, TN in October 2022 North America’s First Commercial Adva
Slide 33: North America's First Commercial Advanced Nuclear Fuel Fabrication Facility
North America’s First Commercial Advanced Nuclear Fuel Fabrication Facility Digital rendering of a TRISO Fuel Facility © 2023 X-Energy Reactor Company, LLC, all rights reserved 33
Slide 34: Q&A (Sessions 1-5)
Q&A (Sessions 1-5) energy
Slide 35: Commercial Delivery
Commercial Delivery 06 – J. Clay Sell, Chief Executive Officer Thomas Nixon, Senior Vice President, Commercial Operations
Slide 36: Delivery Milestones
Delivery Milestones Conceptual and preliminary design phases have been completed Definition Phase Development Phase Execution Phase Conceptual Design ✓ Preliminary Design✓ Final Design Construction Commissioning ✓Complete initial design ✓Complete system • System development • Order components • Syst
Slide 37: Best Practices for First-of-a-Kind Xe-100 Development
Best Practices for First-of-a-Kind Xe-100 Development Clear roles and responsibilities and leveraging the expertise of our partners will enable efficient design, procurement and construction Management is Actively De-Risking Construction ✓Keeping design standardized by utilizing 4D modeling for a bu
Slide 38: Best-in-Class, Blue-Chip Suppliers
Best-in-Class, Blue-Chip Suppliers X-energy has selected 27 vendors, many of whom are well-established nuclear industry suppliers, through a competitive bidding process Integrated Product Development Selected Suppliers X-energy has a signed Preferred Strategy Supplier Arrangement (PSSA) with a handf
Slide 39: Pursuing Regulatory Approval with the NRC
X-energy is Pursuing Regulatory Approval with the NRC Under a Well-Established and Risk-Informed Licensing Process Regulatory Pathway 10 CFR Part 50 Pathway • Pursuing a well-established, risk-informed licensing process in the U.S. used by 1 more than 100 reactors (including nearly all currently lic
Slide 40: Progress on U.S. Regulatory Process
Progress on U.S. Regulatory Process We believe we are a frontrunner in the deployment of advanced Key NRC Milestones reactors; current scope of work under the Dow joint development agreement includes the preparation and Q2 2022: X-energy submitted first ever Category II Fuel Fabrication facility lic
Slide 41: Achievements to De-Risk Design and Review Costs
X-energy’s Achievements to De-Risk Design and Review Costs X-energy Has Made Significant Progress to De-Risk Design Our Revised Baseline Process High level of fidelity and granularity in key subsystems Summer 2022 • Completed preliminary design of key subsystems in December 2022 • X-energy selects t
Slide 42: Illustrative Costs to Build Advanced SMRs
Illustrative Costs to Build Advanced SMRs FOAK to NOAK Capital Cost Reduction Lower SMR Capital Cost Reduces Single Project Risk(1) Overnight costs expected to decrease with movement along learning DOE Liftoff report acknowledges recent increase in costs and expects a curve, build-out of supply chai
Slide 43: Key Factors Contributing to Increased Cost Estimates
Key Factors Contributing to Increased Cost Estimates Macro Factors Scope and Design Factors Historically high inflation and increasing Period of performance and scope interest rates impacting key components increases associated with additional Historic Dow and construction materials steam and power
Slide 44: Use Cases & Customer Pipeline
Use Cases & Customer Pipeline 07 – Dr. Benjamin Reinke, Vice President, Global Business Development
Slide 45: Versatility Creates Opportunity for New Nuclear Applications
Versatility Creates Opportunity for New Nuclear Applications X-energy is targeting end-markets beyond just conventional power generation to satisfy diverse decarbonization needs Conventional High-Temperature Power Steam for Generation Industrial Use Replace & Canadian Oil Sands Re-Use Legacy Decarbo
Slide 46: Versatility Creates Opportunity for New Nuclear Applications (Cont'd)
Versatility Creates Opportunity for New Nuclear Applications (Cont’d) Xe-100 could enable bespoke solutions for the world’s most challenging decarbonization efforts Repurposes Coal Facilities Supports Industrial Applications Enables Clean Hydrogen Production DOE identified ~315 operating and retired
Slide 47: Meaningful Customer Support
Meaningful Customer Support Industry leaders in both power generation and industrial applications recognize the Xe-100’s ability to facilitate decarbonization OPG is the third largest utility in Canada and one of Energ power Grant County Public Utility District (“GCPUD”) is a the largest, most diver
Slide 48: Growing Customer Pipeline
Growing Customer Pipeline X-energy’s current pipeline represents 30+ estimated opportunities across a variety of use cases and geographies Tier I – Advanced Partnerships In active negotiations with six parties, each with unique use cases Confidential Confidential European Utility U.S. Utility Signed
Slide 49: Q&A (Sessions 6-7)
Q&A (Sessions 6-7) energy
Slide 50: Financials & Unit Economics
Financials & Unit Economics 08 – Mark Mize, Senior Vice President & Chief Financial Officer Sam Levenback, Vice President, Corporate Development
Slide 51: Capex light, Services-Driven Business Model Drives Attractive Financial Metrics
Capex light, Services-Driven Business Model Drives Attractive Financial Metrics Project Services Description Licensing fees for use of proprietary Xe-100 technology Reactors Licensing Fee X-energy to coordinate assembly & construction support with customers and 3rd party vendors – X-energy is not an
Slide 52: Illustrative Unit Economics: Xe-100 4-Pack (320MWe)
Illustrative Unit Economics: Xe-100 4-Pack (320MWe) Timing Estimated Cash Revenue Category Gross Margin (1) T-6 T-5 T-4 T-3 T-2 T-1 COD T+1 LT FOAK NOAK Xe-100 Licensing Fees 100% $75mm $250mm 20% 20% 60% Fuel Initial Load 5-10% $120-130mm $95-105mm 100% Refueling 5-10% $20-30mm / Yr. $20-30mm /
Slide 53: Illustrative Unit Economics: Xe-100 4-Pack (320MWe) (Cont'd)
Illustrative Unit Economics: Xe-100 4-Pack (320MWe) (Cont’d) ILLUSTRATIVE 4-PACK REACTOR (320MWe) ECONOMICS 60-Year Life ($USD in millions) T-6 T-5 T-4 T-3 T-2 T-1 COD T+1 LT of Plant Licensing Fee—$50 $50 — — $150—$250 Fuel — — — 125 25 1,450 1,600 Services 10 10 250 250 250 250 90 5 261 1,375 Reve
Slide 54: Delivery Schedule & Other Key Assumptions
Delivery Schedule & Other Key Assumptions COD Schedule Range(1) Other Key Assumptions 20 • The ARDP grant and compensation from our partner are treated as revenue, with the Company expecting to recognize ~$4.0-4.75bn of revenue vs. ~$4.75-5.75bn of total program costs incurred from 2023 to 2029(2,3)
Slide 55: Transaction Overview
Transaction Overview Summary Illustrative Pro-forma Valuation â–ª Pre-money equity value of $1.8 billion in the SPAC merger, reflecting $1,697 Transaction Share Price $10.00 million of X-energy Equity Rollover and $103 million of Series C-2 Financing Pro-forma Shares Outstanding 232 â–ª $103 million
Slide 56: Pro Forma Capitalization
Pro Forma Capitalization Pro Forma Equity Ownership Pro Forma Capitalization as of March 31, 2023(4,5) Strike Number of % Ownership Transaction Price Shares Basic* ($ in millions) Pre-Money Adj. Pro-Forma Basic Shares Cash(6,7) $54 $418 $472 AAC Public Shareholders 47.0 20.2% Existing X-energy Inves
Slide 57: Q&A (Financials & Unit Economics)
Q&A (Financials & Unit Economics)
Slide 58: Thank you
Thank you energy
Slide 59: Appendix
Appendix energy
Slide 60: Endnotes
Endnotes Infrastructure Investing Accolades Note: There may be other award categories for which Ares, its funds or its portfolio companies were considered but did not receive awards. The awards noted herein relate only to selected funds/strategies and may not be representative of any given client’s