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Ares Acquisition Corporation *

Ares Acquisition Corporation *

Jan 15, 2021 by Matt Cianci

LIQUIDATION – 10/31/23 – LINK

  • The Company anticipates that the last day of trading in the Class A ordinary shares will be November 6, 2023.
    • The per-share redemption price will be approximately $10.79

The below-announced combination was terminated on 10/31/23.  It will remain on the page for reference purposes only. Once a new combination is announced it will be added to the top of the page.

PROPOSED BUSINESS COMBINATION: X-Energy, Inc.

ENTERPRISE VALUE: $1.185 billion
ANTICIPATED SYMBOL: tbd

Ares Acquisition Corporation proposes to combine with X-Energy, Inc.

X Energy Reactor Company, LLC (“X-energy”) is a leading developer of small modular nuclear reactor and fuel technology for clean energy generation that is redefining the nuclear energy industry through its development of safer and more efficient advanced small modular nuclear reactors and proprietary fuel to deliver reliable, zero-carbon and affordable energy to people around the world. X-energy’s simplified, modular and intrinsically safe SMR design greatly expands applications and markets for deployment of nuclear technology and drives enhanced safety, lower cost and faster construction timelines when compared with other SMRs and conventional nuclear

SUBSEQUENT EVENT – 9/13/23 – LINK

  • Ares Management Corporation (NYSE: ARES) will provide $50 million as convertible preferred stock.
    • Kam Ghaffarian, the Founder and Executive Chairman of X-energy, will contribute around $30 million to pay off some of X-energy’s debt.
      • He will also receive approximately $30 million worth of PIPE shares when the transaction is completed.
    • These investments are expected to take place alongside the business combination.
    • With Ares’ previous $30 million investment in December 2022, the total investment from Ares in X-energy will be $80 million when the business combination is finalized.
  • Combined with X-energy’s $103 million C-2 private financing and cash-in-trust, this additional capital is expected to deliver approximately $534 million to the combined company, assuming no redemptions by AAC shareholders in connection with the shareholder vote to approve the business combination.
  • 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 $1.05 billion from $1.8 billion.

EXTENSION – 8/1/23 – LINK

  • The SPAC approved the extension from August 4, 2023 to November 6, 2023.
    • 1,392,821 shares were redeemed for $10.58 per share.
    • $0.0255/share per month will be deposited into the trust account.

SUBSEQUENT EVENT – 6/12/23 – LINK

  • Under the amended terms, X-energy’s pre-money equity value has been revised to $1.8 billion from approximately $2.1 billion.

EXTENSION – 2/3/23 – LINK

  • The Company will extend the date by which it has to consummate a business combination from February 4, 2023 to August 4, 2023.
  • Holders of 53,002,919 Class A ordinary shares exercised their right to redeem their shares for cash at a redemption price of approximately $10.17 per share.
  • The Company will make monthly deposits directly to its trust account of $1.2 million.

TRANSACTION

  • The business combination ascribes a pre-money equity value of approximately $2.0 billion to X-energy.
  • Existing X-energy equity holders will roll 100% of their existing equity interests into the combined company.
  • The combined company will receive approximately $1 billion of cash held in AAC’s trust account, assuming no redemptions by AAC shareholders
  • Institutional and strategic investors have also invested or committed $120 million in financing.
    • This includes an invested private round of financing, which comprises $30 million from Ares and $45 million from OPG and Segra Capital Management, a leading nuclear energy-focused hedge fund, as well as an additional commitment of $45 million from Ares to be invested concurrent with the closing of the transaction

Updated Transaction Overview

New Transaction Overview

aac 2

Old Transaction Overview

ares overview

PIPE

Preferred Stock PIPE

  • The Investor has committed to purchase in a private placement, to close immediately prior to the closing of the Business Combination, 45,000 shares of Series A preferred stock of AAC (the “Series A Preferred Stock”) for a purchase price of $1,000.00 per share, resulting in gross proceeds to AAC of $45.0 million (the “PIPE Commitment”) as such amounts may be reduced as described below.
    • The PIPE Commitment will be reduced on a dollar-for-dollar basis by the amount by which
      • (i) the sum of
        • (A) the amount of cash available in the trust account established in connection with AAC’s initial public offering immediately prior to the Closing, less amounts required for any redemptions of Class A common stock by AAC’s public shareholders in connection with the vote to approve the Business Combination (to the extent not already paid); plus
        • (B) the aggregate proceeds, if any, actually received by AAC in connection with any Permitted Financing prior to January 15, 2023, exceeds
      • (ii) $400.0 million.
    • Any such reduction in the PIPE Commitment shall be applied to reduce the Investor’s obligation under the Commitment Letter.
    • In no event shall any reduction to the PIPE Commitment exceed $25.0 million in the aggregate. X-energy and the Investor may also mutually agree to reduce the amount of the PIPE Commitment.

If AAC enters into subscription or similar agreements with one or more unaffiliated third-party investors (the “Other Investors”) pursuant to which the Other Investors agree to purchase from AAC shares of Class A common stock, shares of one or more series of preferred stock, or convertible debt securities or any other security convertible into or exchangeable or exercisable for equity securities AAC (such securities, the “Alternative Securities”) substantially concurrently with the Closing, then the obligations of the Investor under the PIPE Commitment will be null and void. In such event, the Investor will enter into a subscription or similar agreement on the same terms and conditions as the Other Investors to purchase Alternative Securities having an aggregate purchase price of $45,000,000

  • The obligation of the Investor to fund the PIPE Commitment will terminate automatically and immediately upon the earliest to occur of:
    • (a) the termination of the Business Combination Agreement
    • (b) the closing of the Business Combination
    • (c) other than a claim by the Company against the Investor or the Guarantor for the remedies expressly permitted by Section 17 of the Commitment Letter (and then, subject to the terms and conditions of the Commitment Letter), the Company or any of its affiliates or any other person claiming by, through or for the benefit of any of them, directly or indirectly, instituting any legal proceeding or bringing any other claim, against the Investor, and any of its affiliates, or any of their respective representatives
    • (d) such time as the Investor or its affiliates or designees has purchased $75.0 million or more in aggregate principal amount of X-energy’s Series C-2 Convertible/Exchangeable Promissory Notes in the Funded Permitted Financing.

SUBSEQUENT EVENT – 9/13/23 – LINK

  • The PIPE funding was increased to $80M.
    • The increased PIPE subscription has the same terms as the previous.

EARNOUT

Company

  • 25,000,000 Earn Out Units will be earned, released and delivered upon satisfaction of the following milestones:
    • If the share price equals or exceeds $12.50 for any 20/30 trading day period
    • If the share price equals or exceeds $15.00 for any 20/30 trading day period
  • If, following the Closing and prior to the third anniversary of the Closing, there is a Change of Control, then Triggering Event I and Triggering Event II shall be deemed to occur and the Earn Out Units shall vest to the Members and, solely with respect to the Earn Out Units held by AAC following the consummation of the transactions contemplated by the Contribution Agreement, AAC.
  • If a Change of Control occurs following the third anniversary of the Closing and prior to the expiration of the Earn Out Period that results in the holders of New X-energy Class A Common Stock receiving a per share price greater than or equal to $12.50 or $15.00, respectively, then immediately prior to the consummation of such Change of Control, to the extent not previously paid, then Triggering Event I or Triggering Event II will be deemed to have occurred, as applicable, and the Earn-Out Units shall vest to the Members and, solely with respect to the Earn Out Units held by AAC following the consummation of the transactions contemplated by the Contribution Agreement, AAC.
  • The earnout period is 5 years after the Closing Date

Sponsor

  • The sponsor Class B shares will convert into Class A shares following the Closing of the business combination
    • 50% of the shares will vest if the share price equals or exceeds $12.50 for any 20/30 trading day period
    • 50% of the shares will vest if the share price equals or exceeds $15.00 for any 20/30 trading day period

LOCK-UP

  • Sponsor and Company
    • One year following the Closing Date

NOTABLE CONDITIONS TO CLOSING

  • The obligations of X-energy to consummate the Business Combination are also subject to the Available Purchaser 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.

NOTABLE CONDITIONS TO TERMINATION

  • By AAC or X-energy if the Closing has not occurred on or before February 4, 2023

ADVISORS

  • Guggenheim Securities, LLC is acting as financial advisor to X-energy.
  • Latham & Watkins LLP is acting as legal advisor to X-energy.
  • Moelis & Company LLC is acting as financial advisor to AAC.
  • Kirkland & Ellis LLP is acting as legal advisor to AAC.
  • Ocean Tomo, a part of J.S. Held, acted as financial advisor 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
  • Ropes & Gray LLP is acting as legal advisor to the capital markets advisors.

MANAGEMENT & BOARD

Executive Officers

David B. Kaplan, 53
Chief Executive Officer and Co-Chairman

Mr. Kaplan is a Co-Founder of Ares, a Director and Partner of Ares Management Corporation and Co-Chairman of the Ares Private Equity Group. He is a member of the Ares Executive Management Committee. He additionally serves on the Ares Private Equity Group’s Corporate Opportunities, Asia Private Equity and Special Opportunities Investment Committees. Mr. Kaplan joined Ares in 2003 from Shelter Capital Partners, LLC, where he was a Senior Principal from June 2000 to April 2003. From 1991 through 2000, Mr. Kaplan was a Senior Partner of Apollo Management, L.P. and its affiliates, during which time he completed multiple private equity investments from origination through exit. Prior to Apollo Management, L.P., Mr. Kaplan was a member of the Investment Banking Department at Donaldson, Lufkin & Jenrette Securities Corp. Mr. Kaplan currently serves as a member of the boards of directors of New Guitar Center Holdings, Inc., Number Holdings, Inc., the parent entity of 99 Cents Only Stores LLC, CHWR Group GP LLC, the indirect controlling entity of Cooper’s Hawk Winery & Restaurants, Floor and Decor Holdings, Inc. and MYT Netherlands Parent B.V., the parent of Mytheresa GmbH, where he is currently interim Chairman. Mr. Kaplan’s previous public company board of directors experience includes Maidenform Brands, Inc. where he served as the company’s Chairman, GNC Holdings, Inc., Dominick’s Supermarkets, Inc., Stream Global Services, Inc., Orchard Supply Hardware Stores Corporation, Smart & Final, Inc. and Allied Waste Industries Inc. Mr. Kaplan also serves on the board of directors of Cedars-Sinai Medical Center and serves on the President’s Advisory Group of the University of Michigan. Mr. Kaplan graduated with High Distinction, Beta Gamma Sigma, from the University of Michigan, School of Business Administration with a B.B.A. concentrating in Finance.

Jarrod Phillips, 43
Chief Financial Officer

Mr. Phillips is a Partner and Chief Accounting Officer of Ares Management Corporation and a member of the Management Committee. Prior to joining Ares in 2016, Mr. Phillips was a Partner at Deloitte & Touche LLP, where he focused on financial services and asset management assurance and advisory services. Mr. Phillips holds a B.S. from Virginia Polytechnic Institute and State University in Accounting. Mr. Phillips holds a CPA license in the State of California.

Allyson Satin, 35
Chief Operating Officer

Ms. Satin is a Managing Director of Ares Management Corporation and serves as a member of the Ares Diversity and Inclusion Council. Previously, Ms. Satin was a Principal in the Ares Private Equity Group. Prior to joining the Ares Private Equity Group in 2009, Ms. Satin was an investment banking Analyst in the Global Financial Sponsors Group at Barclays Capital (formerly Lehman Brothers). Ms. Satin currently serves on the Board of Directors of Number Holdings, Inc., the parent entity of 99 Cents Only Stores LLC. Ms. Satin holds a B.S. from the University of California, Berkeley Haas School of Business in Business Administration.

Peter Ogilvie, 37
Executive Vice President of Strategy

Mr. Ogilvie is a Partner at Ares Management Corporation and Head of the Ares Corporate Strategy Team. Mr. Ogilvie co-founded the Corporate Strategy Team to drive growth and development across the Ares platform through acquisitions, balance sheet investments, partnerships and new team onboarding. He has led the Corporate Strategy Team’s efforts on numerous transactions including the acquisition of American Capital, Ltd. by Ares Capital Corporation, the business development company managed by Ares, and the formation of Ares’ business partnership with Sumitomo Mitsui Banking Corporation. Mr. Ogilvie serves as a board member for LightPoint Financial Technology and Ares Australia Management. Mr. Ogilvie joined Ares in 2007 in the U.S. Direct Lending Group and previously worked in the Leveraged Finance and Restructuring Group at Credit Suisse. Mr. Ogilvie holds a B.A. from Yale University in Economics.

Board of Directors

Michael J Arougheti, 48
Co-Chairman

Mr. Arougheti is Co-Founder, Chief Executive Officer and President, as well as a Director of Ares Management Corporation. He is a member of the Ares Executive Management Committee. He additionally serves as Co-Chairman of ARCC and as a director of ACRE. Mr. Arougheti also is a member of the Ares Credit Group’s U.S. Direct Lending Investment Committee, the Ares Equity Income Opportunity Strategy Portfolio Review Committee and the Ares Operations Management Group. Prior to joining Ares in 2004, Mr. Arougheti was employed by Royal Bank of Canada from 2001 to 2004, where he was a Managing Partner of the Principal Finance Group of RBC Capital Partners and a member of the firm’s Mezzanine Investment Committee. Mr. Arougheti oversaw an investment team that originated, managed and monitored a diverse portfolio of middle-market leveraged loans, senior and junior subordinated debt, preferred equity and common stock and warrants on behalf of RBC and other third-party institutional investors. Mr. Arougheti joined Royal Bank of Canada in October 2001 from Indosuez Capital, where he was a Principal and an Investment Committee member, responsible for originating, structuring and executing leveraged transactions across a broad range of products and asset classes. Prior to joining Indosuez in 1994, Mr. Arougheti worked at Kidder, Peabody & Co., where he was a member of the firm’s Mergers and Acquisitions Group. Mr. Arougheti serves on the Board of Directors of Operation HOPE, a not-for-profit organization focused on expanding economic opportunity in underserved communities through education and empowerment. He is additionally a member of the PATH Organization Leadership Council. Mr. Arougheti received a B.A. in Ethics, Politics and Economics, cum laude, from Yale University.

Stephen Davis, 63
Director 

Mr. Davis currently serves as a senior strategic advisor and the interim director, China Country Office, at the Bill & Melinda Gates Foundation since September 2020. Mr. Davis serves as co-chair of the World Health Organization’s Digital Health Technical Advisory Group and is a member of numerous boards and advisory committees. Mr. Davis is a lecturer at the Stanford Graduate School of Business, a Distinguished Fellow at the World Economic Forum, and a member of the Council on Foreign Relations. Previously, Mr. Davis served as the president and Chief Executive Officer of PATH, a leading global health innovation organization from June 2012 to January 2020. Mr. Davis also served as the Director of Social Innovation at McKinsey & Company, a global consultancy firm from 2010 to 2012. Mr. Davis served as the Chief Executive Officer of Corbis Corporation, a digital media pioneer from 1997 to 2007. Mr. Davis was an attorney at K&L Gates from 1988 to 1993. Mr. Davis received a B.A. in Religion and Politics from Princeton University, a M.A. in China Studies from the University of Washington and a J.D. from Columbia University School of Law.

Kathryn Marinello, 64
Director 

Ms. Marinello is the Chief Executive Officer of PODS, a moving and storage company. From January 2017 to June 2020, Ms. Marinello was the President, Chief Executive Officer, and a member of the board of directors of Hertz Global Holdings, Inc., the parent company of the Hertz Corporation, which operates the Hertz, Dollar and Thrifty vehicle rental brands and is one of the largest worldwide vehicle rental companies. In May 2020, Hertz filed voluntary petitions for relief under chapter 11 of title 11 of the U.S. Bankruptcy Code primarily due to the impact of the COVID-19 pandemic. From 2014 to 2017, Ms. Marinello was a consultant to Ares Management LLC where she assisted in targeting and acquiring companies. Ms. Marinello also served as Chair, President and Chief Executive Officer of Stream Global Services, Inc., a business process outsourcing service provider and a former Ares portfolio company from 2010 to March 2014. From 2006 to 2010, Ms. Marinello served as Chair, Chief Executive Officer and President of Ceridian Corporation, a provider of human resources software and services. From 1997 to 2006, Ms. Marinello held several senior roles at General Electric Co. Ms. Marinello currently serves as Chairperson of the board of directors of Concentrix Corporation (NASDAQ: CNXC), and as a member of the board of directors of AB Volvo. She previously served as a member of the boards of directors of The Nielsen Company B.V. from 2014 to 2017, General Motors Company (NYSE: GM) from 2007 to 2016, and RealPage, Inc. (NASDAQ: RP) from 2015 to 2017. Ms. Marinello holds a Master of Business Administration from Hofstra University and a Bachelor of Arts from State University of New York at Albany.

Felicia Thornton, 56
Director 

Ms. Thornton currently serves as Vice Chairman of the board of directors of Number Holdings, Inc., the parent entity of 99 Cents Only Stores LLC, a deep-discount retailer, having previously held executive positions at 99 Cents Only Stores LLC, including Interim Chief Executive Officer from June 2019 to March 2020 and Chief Financial Officer and Treasurer from November 2015 to August 2018. Ms. Thornton currently serves as a member of the boards of directors of PACTIV Evergreen Inc., a fresh food packaging company, where she currently serves as the chair of the Audit Committee, Convergint Technologies Group L.P., a global independent security integration company, where she currently serves as the chair of the Audit Committee, CoolSys, Inc., a private refrigeration and HVAC servicing company, where she currently serves as chair of the Audit Committee and Floor & Decor Holdings, Inc., a specialty retailer of hard surface flooring and related accessories, where she currently serves as the chair of the Nominating and Corporate Governance Committee. Previously, Ms. Thornton served as Co-Chief Executive Officer, President and Chief Operating Officer for DeMoulas Super Market, Inc., (“DeMoulas”), a supermarket chain, from June 2014 to December 2014 and as the Chief Executive Officer of Knowledge Universe U.S., a private childhood education company, from 2006 to 2011. Ms. Thornton served as Chief Financial Officer and led overall strategy for Albertsons, a grocery and drugstore company, from 2001 to 2006. Ms. Thornton served in a variety of executive strategic and financial roles from 1992 to 2000 for Ralphs Grocery Company, Inc., a grocery store chain, and for Fred Meyer, a retail supermarket company, both of which eventually became part of The Kroger Company, a global retailer of grocery, multi-department, discount, convenience and jewelry stores, where Ms. Thornton served as Group Vice President responsible for retail operations. Ms. Thornton has served as a member of the boards of directors of public and private companies, including Nordstrom, Inc., a luxury retailer, from November 2010 to May 2012 and for Knowledge Universe Education, Inc. from November 2006 to May 2012. Ms. Thornton is a fellow of the National Association of Corporate Directors and a member of the Latino Corporate Director Association. Ms. Thornton received a B.S. in Economics from Santa Clara University and an M.B.A. from the University of Southern California.

ByMatt Cianci