Ares Acquisition Corp. III · NYSE:AAC
Ares Acquisition Corp. III — Ares Acquisition — SPAC Merger (September 2023)
52 slides from Ares Acquisition Corp. III's SPAC merger presentation, Sep 13, 2023
Slide 1: Clean • Safe • Secure • Affordable
Exhibit 99.2 Clean • Safe • Secure • Affordable © 2023 X-Energy Reactor Company, LLC, all rights reserved 1 1 © 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: Transaction Updates Strongly Reinforce Shareholder Alignment
Transaction Updates Strongly Reinforce Shareholder Alignment X-energy has obtained approximately $80 million of capital commitments from Ares and Kam Ghaffarian at a compelling pre-money equity value of $1.05 billion (1) • Ares and X-energy Founder, Kam Ghaffarian, have committed to a combined inves
Slide 4: Ares is a Compelling SPAC Partner for X-energy
Ares is a Compelling SPAC Partner for X-energy (3) Leading Partnership with Ares Acquisition Corporation Ares’ Sponsorship and Deep Infrastructure Investing Experience ~1,980 ~3,100 Portfolio >10 IPOs Institutional Companies Ares has successfully brought Relationships Deep executive network and over
Slide 5: 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 6: Introduction & Company Overview
Introduction & Company Overview © 2023 X-Energy Reactor Company, LLC, all rights reserved 6
Slide 7: Two Challenges in Nuclear
Two Challenges in Nuclear is the only energy source for reliability and decarbonization Opposition “Always-on” baseload energy Global Energy Need to drastically Demand Up Reduce Carbon (1) 50% by 2050 Emissions Generates zero carbon emissions Can be flexibly located near Fossil fuels currently load
Slide 8: 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 9: X-energy at a Glance
X-energy at a Glance X-energy’s Advanced Nuclear Technology Founded in Rockville, MD 2009 Headquarters Our High Performing Reactor: Xe-100 Gen-IV High-Temperature Gas-cooled Reactors (HTGR) have Rooted in the nuclear 14 years of investment advantages in sustainability, economics, reliability, safety
Slide 10: Our Traction, Accomplishments & Risk Reduction to Date
Our Traction, Accomplishments & Risk Reduction to Date 2009 - 2014 2015 - 2018 2019 - 2021 2022 - 2023 Initial Concept Technical Development Focus Preparation for Commercialization Customer Wins & Commercialization Acceleration Founded X-energy hired fuel team and Clay Sell appointed CEO Signed fram
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 Steve Miller Dr. Kam Ghaffarian J. Clay Sell Harlan Bowers Senior Vice President & Ex
Slide 12: Key Investment Highlights
Key Investment Highlights Powerful Significant total addressable market for advanced nuclear – a carbon-free, always-on generation source Tailwinds in capable of addressing the global need for clean energy Clean Energy Safe, Simplified and designed to be meltdown proof, the Xe-100 drives enhanced sa
Slide 13: X-energy is Building Advanced Nuclear Technology
X-energy is Building Advanced Nuclear Technology © 2023 X-Energy Reactor Company, LLC, all rights reserved 13
Slide 14: 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 Affordable Clean cost – revolutioni
Slide 15: 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 (1) SMRs Traditional Renewables Large-Scale Gen III+ / Gen IV Fossil Fuels (Solar & Wind) Nuclear Carbon-Free û✓✓✓✓ Power Reliable Baseload ✓û
Slide 16: 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 17: 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) (1) Site-Bounded Emergency Planning Zone (“EPZ”) Xe-100 Conventional Nuclear 320 MWe 4-Pack ~1,150 MWe Power p
Slide 18: TRISO-X Fuel – Intrinsic Safety
TRISO-X Fuel – Intrinsic Safety (1) The Department of Energy describes TRISO fuel as “the most robust nuclear fuel on Earth” 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 manufactu
Slide 19: 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 19
Slide 20: 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 21: 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 22: 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 23: 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 24: Competitive Position Reinforced by $1.2 Billion ARDP Grant
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 Construction of the Commercialization of ARDP to Support: 1 Design of the Xe-100 2 3 first fuel facility the fir
Slide 25: 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 firs
Slide 26: X-energy and Energy Northwest Sign JDA for Xe-100 Project
X-energy and Energy Northwest Sign JDA for Xe-100 Project On July 19, 2023, Energy Northwest and X-energy announced the signing of a joint development agreement (”JDA”) for up to 12 Xe-100 reactors, or up to 960 MW, in central Washington Signed Joined Development Agreement About Energy Northwest • E
Slide 27: 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 the largest, most Grant County Public Utility District (“GCPUD”) is a member of diverse
Slide 28: Growing Customer Pipeline
Growing Customer Pipeline X-energy’s current pipeline represents 50+ 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 29: Market Overview
Market Overview © 2023 X-Energy Reactor Company, LLC, all rights reserved 29
Slide 30: Global Macro Themes Drive Support for Nuclear
Global Macro Themes Drive Support for Nuclear (1) Net-zero targets require substantial build-out of clean, firm generation resources that can reach many sectors of the economy (2) (3) Nuclear Can Support Decarbonization Beyond Electric Power Estimated Capacity Additions Required to Achieve Net-Zero
Slide 31: 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 (1) DOE Modeling Scenarios of Advanced Nuclear Capacity by 2050 (GW) Est. FOAK to NOAK LCOE Ranges of Clean, Firm Resources ($/MWh) FOAK with Tax High I
Slide 32: Policymakers Recognize the Importance of Nuclear
Policymakers Recognize the Importance of Nuclear to Address the Global Need for Clean Power United States International The Senate is committed to embracing and promoting nuclear power This government has worked will full force to remove the obstacles erected as a clean baseload energy source necess
Slide 33: Inflation Reduction Act Represents Significant Increase in U.S. Government Support
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 34: 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 (1) (2) Clean Electricity Production Tax Credit (§ 45Y) Clean Electricity Investment Tax Credit (§ 48E) Up to ~60 cents per dollar of construction costs, assuming a
Slide 35: 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 Indiana – Passed state legislation to ease state Nebraska – State bill West Virginia – Governor Justice Clean E
Slide 36: 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 Q2 2022: X-energy submitted first ever Category II Fuel Fabrication facility license development agreement includes the preparation
Slide 37: Financial Summary
Financial Summary © 2023 X-Energy Reactor Company, LLC, all rights reserved 37
Slide 38: 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 • X-energy to coordinate assembly & construction support Licensing Fee Reactors rd with customers and 3 party vendors – X-energy is n
Slide 39: Illustrative Unit Economics: Xe-100 4-Pack (320MWe)
Illustrative Unit Economics: Xe-100 4-Pack (320MWe) Timing Cash Revenue Estimated Category Gross Margin T-6 T-5 T-4 T-3 T-2 T-1 COD T+1Æ LT (1) 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. $20-30mm / Yr
Slide 40: Illustrative Unit Economics: Xe-100 4-Pack (320MWe) (Cont'd)
Illustrative Unit Economics: Xe-100 4-Pack (320MWe) (Cont’d) ILLUSTRATIVE 4-PACK REACTOR (320MWe) ECONOMICS 60-Year Life ($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
Slide 41: Delivery Schedule & Other Key Assumptions
Delivery Schedule & Other Key Assumptions (1) COD Schedule Range 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. (2,3) ~$4.75-5.75bn of total program costs incurred from 2023 to 20
Slide 42: Transaction Overview
Transaction Overview © 2023 X-Energy Reactor Company, LLC, all rights reserved 42
Slide 43: Transaction Overview
Transaction Overview Illustrative Pro-forma Valuation Summary ▪ Pre-money equity value of $1.05 billion in the SPAC merger, reflecting $947 Transaction Share Price $10.00 million of X-energy Equity Rollover and $103 million of Series C-2 Financing Pro-forma Shares Outstanding 135 ▪ $103 million secu
Slide 44: Transaction Overview (As-converted)
Transaction Overview (As-converted) Illustrative Pro-forma Valuation Summary ▪ Pre-money equity value of $1.05 billion in the SPAC merger, reflecting $947 Transaction Share Price $10.00 million of X-energy Equity Rollover and $103 million of Series C-2 Financing Pro-forma Shares Outstanding 164 ▪ $1
Slide 45: 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 46: Selected Publicly Traded Companies – Operational Statistics
Selected Publicly Traded Companies – Operational Statistics SMR Nuclear Services / Equipment Energy Transition 2025E ’22A-’24E Median: 6% ’22A-’24E Median: 20% 126% 53% 35% 20% 16% 6% 7% 6% 5% SMR Nuclear Services / Equipment Energy Transition 2026E 2024E Median: 20% 2024E Median: 26% 35% 33% 24% 20
Slide 47: Selected Publicly Traded Companies – TEV / Revenue
Selected Publicly Traded Companies SMR Nuclear Services / Equipment Energy Transition 2025E 2023E Median: 3.2x 2023E Median: 5.9x 10.4x 6.3x 5.9x 3.9x 3.3x 3.2x 2.2x 2.4x 2.2x SMR Nuclear Services / Equipment Energy Transition 2026E 2024E Median: 3.0x 2024E Median: 5.3x 8.2x 5.4x 5.3x 3.2x 3.0x 2.0x
Slide 48: Selected Publicly Traded Companies (Cont'd) – TEV / EBITDA
Selected Publicly Traded Companies (Cont’d) SMR Nuclear Services / Equipment Energy Transition 2025E 2023E Median: 15.3x 2023E Median: 19.4x 37.0x 19.4x 16.9x 15.3x 14.0x 12.2x N.M N.M. N.M. SMR Nuclear Services / Equipment Energy Transition 2026E 2024E Median: 12.5x 2024E Median: 15.4x 24.8x 15.7x
Slide 49: Appendix
Appendix © 2023 X-Energy Reactor Company, LLC, all rights reserved 49
Slide 50: Glossary
Glossary 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
Slide 51: Risk Factors
Risk Factors 1) Our business requires substantial investment. At the time of the Business Combination, the aggregate capital raised from the Series C-2 Financing and PIPE Financing will be sufficient to satisfy the minimum cash condition for the transaction; however, the commitments will not be suff
Slide 52: 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