Ares Acquisition Corp. III · NYSE:AAC
Ares Acquisition Corp. III — Ares Acquisition — SPAC Merger (December 2022)
49 slides from Ares Acquisition Corp. III's SPAC merger presentation, Dec 6, 2022
Slide 1: Clean • Safe • Secure • Affordable
Clean • Safe • Secure • Affordable Exhibit 99.2
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: 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) Note: As of September 30, 2022. AUM amounts include funds managed by Ivy Hill Asset Management, L.P., a registered investment adviser
Slide 4: X-energy & Ares – A Differentiated Partnership
Existing Shareholder and Strategic Support 100% rollover from existing investors and funding from key strategic partners, including Dow Inc. (“Dow”) and Ontario Power Generation Inc. (“OPG”) X-energy & Ares – A Differentiated Partnership Compelling Tailwinds in Clean Energy Advanced nuclear is a key
Slide 5: Introduction & Company Overview
Introduction & Company Overview
Slide 6: Two Challenges in Opposition
Source: EIA – International Energy Outlook (October 2021) Source: IEA – New IEA World Energy Outlook (October 2022) © 2022 X-Energy Reactor Company, LLC, all rights reserved Two Challenges in Opposition Global Energy Demand Up 50% by 2050(1) Need to drastically Reduce Carbon Emissions Nuclear is the
Slide 7: 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 Digital rendering of a Xe-100 4-pack (320MWe) Expected EPZ Nuclear Islands Energy for th
Slide 8: X-energy at a Glance
X-energy at a Glance Founded in 2009 13 years of investment and development Rockville, MD Headquarters Rooted in the nuclear community with proximity to the DOE and Nuclear Regulatory Commission (“NRC”) ~400 Employees Leading Gen IV nuclear development and licensing team(1) ~$580mm Investment Capita
Slide 9: Our Traction, Accomplishments & Risk Reduction to Date
Our Traction, Accomplishments & Risk Reduction to Date 2009 - 2014 2015 - 2018 2019 - 2021 2022 Initial Concept Technical Development Focus Preparation for Commercialization Customer Wins & Commercialization Acceleration Founded by Kam Ghaffarian X-energy hired fuel team and begins development of TR
Slide 10: Leadership Team: Deep Nuclear Roots, Technical & Business Pedigrees
Leadership Team: Deep Nuclear Roots, Technical & Business Pedigrees Key Leadership Team J. Clay Sell Chief Executive Officer Dr. Kam Ghaffarian Executive Chairman & Founder 25+ years of energy experience in private and public sectors; former Deputy Secretary of the U.S. DOE 35+ years as a successful
Slide 11: Key Investment Highlights
Key Investment Highlights Powerful Tailwinds in Clean Energy Significant total addressable market (“TAM”) for advanced nuclear – a carbon-free, always-on generation source capable of addressing the global need for clean energy Safe, Advanced Nuclear Design Simplified and designed to be meltdown proo
Slide 12: X-energy is Building Advanced Nuclear Technology
X-energy is Building Advanced Nuclear Technology
Slide 13: X-energy Is Advancing Nuclear Energy
X-energy Is Advancing Nuclear Energy Modular design and off-the-shelf components designed to drive scalability, accelerated timelines and ability to manage construction cost – revolutionizing the construction of nuclear reactors Radically simpler design with 1/6th the safety systems of a traditional
Slide 14: X-energy & Gen IV SMRs are Key to the Energy Transition
Xe-100 output steam expected to achieve temperatures well beyond Gen III+ SMRs X-energy & Gen IV SMRs are Key to the Energy Transition Fossil Fuels Renewables (Solar & Wind) Traditional Large-Scale Nuclear SMRs Gen III+ / Gen IV Carbon-Free Power û ü ü ü ü Reliable Baseload Power ü û ü ü ü Efficient
Slide 15: Xe-100 – A Pioneering Gen IV Nuclear Reactor
Xe-100 – A Pioneering Gen IV Nuclear Reactor Steam Generator TRISO-X Fuel 80 MWe modular design & manufactured components designed to drive scalability, accelerated timeline and cost control Nuclear Island Power Generation Process Heat Steam at 565°C Conventional Island Spent fuel preserved in caske
Slide 16: Xe-100 is Attractive Compared to Conventional Nuclear
$1.1-1.2bn(3) $3.3-10.6bn(4) Xe-100 ~$3,600/kW Reflects NOAK 320 MWe “4-Pack” Xe-100 is Attractive Compared to Conventional Nuclear Xe-100 Conventional Nuclear(1) Power 320 MWe 4-Pack powers ~240k homes ~1,150 MWe powers ~900k homes Applications Baseload Power Load-Following Industrial-Grade Steam B
Slide 17: TRISO-X Fuel – Intrinsic Safety
Step 1 Step 2 Step 3 Step 4 è è è ~15.5% Enriched Uranium Kernel Feedstock sourced from third parties TRISO Fuel Particle (~1mm Diameter) Uranium kernel encased in carbon and ceramic layers TRISO-X Fuel Pebble (60mm Diameter) ~18,000 TRISO particles per pebble set in graphite matrix Pebble Bed >200,
Slide 18: North America's First Commercial Advanced Nuclear Fuel Fabrication Facility
Digital rendering of a TRISO Fuel Facility North America’s First Commercial Advanced Nuclear Fuel Fabrication Facility
Slide 19: Fuel Facility Construction Progress
Fuel Facility Construction Progress Proven Fuel Demonstration Facility Construction of Fuel Facility X-energy’s TRISO-X Pilot Facility has been operational since 2017 North America’s First Commercial Advanced Nuclear Fuel Fabrication Facility Groundbreaking for X-energy’s TRISO-X facility in Oak Rid
Slide 20: Versatility Creates Opportunity for New Nuclear Applications
High-Temperature Steam for Industrial Use Canadian Oil Sands Decarbonization Critical 24/7 Data Center Power Load Following to Complement Renewable Use Versatility Creates Opportunity for New Nuclear Applications Conventional Power Generation Replace & Re-Use Legacy Coal Sites Clean Hydrogen Product
Slide 21: Versatility Creates Opportunity for New Nuclear Applications (Cont'd)
Versatility Creates Opportunity for New Nuclear Applications (Cont’d) Enables Clean Hydrogen Production Repurposes Coal Facilities Supports Industrial Applications X-energy can provide clean electricity to power Hydrogen Hubs Hydrogen has the potential to become one of the principal fuels in a low-c
Slide 22: X-energy's Thermal Output Well Positioned for Industrial Applications
Source: Steam output temperatures based on respective SMR technology and selected public company disclosure 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 Coal Gasification Hydrogen Steam Reforming Biomass
Slide 23: Competitive Position Reinforced by $1.2 Billion ARDP Grant
ARDP to Fund: Competitive Position Reinforced by $1.2 Billion ARDP Grant X-energy’s selection for the DOE’s Advanced Reactor Demonstration Program represents a critical advantage over other competitors Design of the Xe-100 1 Construction of the first fuel facility 2 Commercialization of the first re
Slide 24: Meaningful Customer Support
Meaningful Customer Support Dow is one of the world’s largest diversified chemical manufacturing companies On August 9, 2022, Dow signed an LOI to build the Xe-100 to provide cost-competitive, carbon free process heat and power to a Dow facility in the Gulf Coast by approximately 2030 Dow is the fir
Slide 25: Growing Customer Pipeline
Growing Customer Pipeline Confidential European Utility Confidential U.S. Utility Looking to replace legacy (Generation II) nuclear assets Focused on meeting site demand needs and modular scalability over time Tier I – Advanced Partnerships In active negotiations with five parties, each with unique
Slide 26: Market Overview
Market Overview Sf energy
Slide 27: Global Macro Themes Drive Support for Nuclear
Global Macro Themes Drive Support for Nuclear Nuclear Can Support Decarbonization Beyond Electric Power(1) Clean Nuclear Baseload Power Complements Intermittent Renewables U.S. Renewables Projected Capacity Growth (GW)(2) U.S. Capacity Factors by Energy Source(3) Total U.S. Greenhouse Gas Emissions
Slide 28: Clean Energy Transition Drives Market Opportunity
Clean Energy Transition Drives Market Opportunity Source: PA Consulting; EIA Note: GW values are in derated terms and will be higher in nameplate terms; Canada is extrapolated from Ontario and Alberta results Global electricity usage does not include demand from China, Iran, North Korea, Russia, Syr
Slide 29: Need for New Capacity Creates Significant Revenue Opportunity
2050E Source: PA Consulting Note: GW values are in derated terms and will be higher in nameplate terms; Canada is extrapolated from Ontario and Alberta results Illustrative 4-pack of Xe-100s (320MWe) economics assume NOAK status achieved and 60-year life of plant; see pg.37 for detailed illustrative
Slide 30: Policymakers Recognize the Importance of Nuclear
Policymakers Recognize the Importance of Nuclear to Address the Global Need for Clean Power United States International Nuclear is the only form of reliable, low carbon electricity generation which has been proven at scale and returns more than a hundred times as much power as a solar site of the sa
Slide 31: 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 Includes Research Funding (i.e., average annual research funding for advanced nuclear since 2009 according to DOE) of $66mm, Project Pele of $40mm, HALEU Demonstration program of $1
Slide 32: IRA Provides Significant Support for SMR Deployment
Per Customer Benefit Potential Value Creation How it Works Tax credit of 1.5¢/kWh adjusted annually for inflation (2.6¢/kWh in 2022) of electricity produced and sold for 10 years of electricity production + 10% boost if reactor is in an "energy community" (e.g. former coal mine or brownfield site) +
Slide 33: Support for Nuclear Continues to Gain Momentum
Inflation Reduction Act Investment / Production Tax Credits $700mm HALEU Support Support for Nuclear Continues to Gain Momentum Nebraska – State bill passed to provide tax incentives for SMRs (2021) Wyoming – Governor Gordon signed legislation to allow retired coal and gas facilities to be replaced
Slide 34: Frontrunner in Deployment of Advanced Reactors
Submitted 7 topical reports and 7 white papers to the NRC to date Q2 2022: X-energy submitted first ever Category II Fuel Fabrication facility license application to the NRC We are a frontrunner in the deployment of advanced reactors Industry leading licensing team of 15 professionals in continuous
Slide 35: Financial Summary
Financial Summary Sf energy
Slide 36: Capex Light, Services-Driven Business Model
Capex light, Services-Driven Business Model Drives Attractive Financial Metrics Project Services Description Reactors Licensing Fee Assembly & Construction Licensing fees for use of proprietary Xe-100 technology X-energy to coordinate assembly & construction support with customers and 3rd party vend
Slide 37: Illustrative Unit Economics: Xe-100 4-Pack (320MWe)
Illustrative Unit Economics: Xe-100 4-Pack (320MWe) Category Estimated Gross Margin Cash Revenue Timing FOAK NOAK(1) T-6 T-5 T-4 T-3 T-2 T-1 COD T+1 Æ LT Xe-100 Licensing Fees 100% $75mm $250mm 20% 20% 60% Assembly & Construction(2) 0-10% $700-750mm $550-600mm 25% 25% 25% 25% Fuel Initial Load 5-10%
Slide 38: Illustrative Unit Economics: Xe-100 4-Pack (Cont'd)
Illustrative Unit Economics: Xe-100 4-Pack (320MWe) (Cont’d) Note: Illustrative 4-pack of Xe-100s (320 MWe) economics assume mid-point of estimated gross margins and cash revenues, NOAK status achieved and 60-year life of plant
Slide 39: Delivery Schedule & Other Key Assumptions
Delivery Schedule & Other Key Assumptions COD Schedule Range(1) Other Key Assumptions Note: Commercialization assumes regulatory permitting approvals have been obtained to permit construction of a facility as projected. The regulatory permitting process, including necessary NRC approvals and licensi
Slide 40: Transaction Overview
Transaction Overview Sf energy
Slide 41: Transaction Overview
Transaction Overview Note: Ares Acquisition Corporation (“AAC”), Ares Management Corporation (“Ares Management”) and its affiliates and/or investment vehicles are collectively referred to herein as “Ares” We anticipate that the Series C-2 Financing will close in advance of the SPAC transaction. As a
Slide 42: Selected Publicly Traded Companies
Selected Publicly Traded Companies Small Modular Reactors Nuclear Services / Equipment Energy Transition Note: Selected Publicly Traded Companies information provided for illustrative purposes only. The Selected Publicly Traded Companies included in this presentation operate in different segments an
Slide 43: Revenue CAGR and EBITDA Margin of Selected Companies
SMR ’24E-’26E REVENUE CAGR EBITDA MARGIN Source: Public company filings and broker estimates from CapitalIQ as of 12/2/2022 Note: Metric noted as “N.M.” when metric not available; Information presented includes forecasts and other forward-looking information based on reports, industry publications a
Slide 44: TEV / Revenue
Source: Public company filings and broker estimates from CapitalIQ as of 12/2/2022 Note: Multiple noted as “N.M.” when multiple is either greater than 50x, negative or not available SMR 2026E TEV / REVENUE Selected Publicly Traded Companies SMR 2025E Energy Transition 2023E Median: 6.5x Nuclear Serv
Slide 45: TEV / EBITDA
Source: Public company filings and broker estimates from CapitalIQ as of 12/2/2022 Note: Multiple noted as “N.M.” when multiple is either greater than 50x, negative or not available TEV / EBITDA Selected Publicly Traded Companies (Cont’d) N.M. N.M N.M. SMR 2026E SMR 2025E N.M. N.M Median Energy Tran
Slide 46: Appendix
Appendix Sf energy
Slide 47: Glossary of Terms
Term/Abbreviation Meaning Baseload Power The minimum amount of electric power delivered or required over a given period of time at a steady rate. Baseload Power Source Base load power sources are the plants that operate continuously to meet the minimum level of power demand 24/7. Brownfield site A b
Slide 48: Risk Factors
Risk Factors Our business requires substantial investment. At the time of business combination announcement, the aggregate commitments to the Series C-2 Financing and PIPE Financing are sufficient to satisfy the minimum cash condition for the transaction; however, the commitments will not be suffici
Slide 49: 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