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Spring Valley Acquisition Corporation

Spring Valley Acquisition Corporation

Oct 16, 2020 by Roman Developer

PROPOSED BUSINESS COMBINATION: NuScale Power, LLC

ENTERPRISE VALUE: $1.866 billion
ANTICIPATED SYMBOL: SMR

NuScale is the provider of a proprietary and innovative advanced nuclear power solution, the NuScale Power Module™ (NPM), which is the only viable, near-term deployable SMR technology. Capable of generating 77 megawatts electric (MWe) of electricity, the NPM is safe, reliable and scalable – NuScale’s VOYGR™ power plant design can accommodate configurations of four, six and 12 modules that can provide up to 924 megawatts per day of electricity.

NuScale’s NPM can serve as a reliable, carbon-free source of power that complements renewable sources such as wind, solar and hydropower generation. The NPM can provide consistent baseload power with available load-following, no matter the time of day, weather or season. Its unique design and safety features allow it to be easily integrated into electric grids or used in a variety of industrial applications such as water desalination, commercial-scale hydrogen production and carbon-capture technology.

In 2020, NuScale’s NPM became the first and only SMR to receive Standard Design Approval from the U.S. Nuclear Regulatory Commission (NRC) – a watershed moment not only for the Company, but also for the nuclear industry. The advanced design of the NPM eliminates the need for two-thirds of the safety systems and components found in today’s large commercial reactors, which significantly improves the economics of NuScale plants compared to traditional nuclear power plants. NuScale’s reactors are designed to safely shut down in an emergency and self-cool, indefinitely, with no need for operator or computer action, power or the addition of water – a first for any commercial nuclear power plant. The intellectual property supporting NuScale’s technology is protected by more than 600 granted or pending patents.

NuScale’s scalable technology and diversified business model are designed to drive exceptional financial results and create long-term value. The Company has an attractive, high-margin business model that monetizes its intellectual property through NPM sales and recovery fees, while driving recurring revenues through critical maintenance services over the lifecycle of a plant. NuScale is positioned to deliver the first VOYGR power plant to a customer as soon as 2027 (based upon customer needs), supported by its established supply chain partners. NuScale anticipates being cash flow positive by 2024.

SUBSEQUENT EVENT – 4/5/22 – 8-K LINK

  • On April 5, 2022, Spring Valley entered into an additional subscription agreement with Nucor Corporation (NYSE: NUE) (“Nucor”) which has committed to a $15 million PIPE for the NuScale-Spring Valley business combination.
  • Total committed PIPE investment increased from $221 million to $236 million.

SUBSEQUENT EVENT – 3/29/22 – 8-K LINK

  • On March 29, 2022, Spring Valley entered into a Subscription Agreement with SailingStone Capital Partners, pursuant to which the PIPE Investor party agreed to purchase 1,000,000 shares of NuScale Corp Class A Common Stock immediately prior to the Closing for a purchase price of $10,000,000. (PIPE Share price: $10.00/Share)
  • Total committed PIPE investment increased from $211 million to $221 million

SUBSEQUENT EVENT – 2/2/22

  •  This $30 million of Samsung C&T’s $50 million PIPE commitment was previously contingent upon the entry into a commercial arrangement among Samsung C&T, Fluor Enterprises Inc. and NuScale. Samsung C&T’s $50 million PIPE commitment is in addition to its previous $20 million equity investment in June 2021.
  • As a result, Samsung C&T has committed a total investment of $70 million in NuScale.
  • With the satisfaction of this contingency, the enhanced commitment by Samsung C&T brings commitments in the PIPE transaction to $211 million.
  • The PIPEwas previously priced at $10/Share.

TRANSACTION

  • At close, NuScale expects up to $413 million of gross cash proceeds, including a $181 million oversubscribed, fully committed PIPE anchored by Samsung C&T Corporation, DS Private Equity, Segra Capital Management and Pearl Energy.
  • NuScale intends to use the proceeds to fund its path to commercialization and expects no additional capital requirements between closing and achieving positive free cash flow.
  • Upon completion of the transaction, Fluor projects to control approximately 60% of the combined company, based on the PIPE investment commitments received in the transaction and the current equity and in-the-money equity equivalents of NuScale Power and Spring Valley.
  • The transaction is expected to close in the first half of 2022 and is subject to approval by Spring Valley’s shareholders as well as other customary closing conditions.

Spring Valley Transaction Overview

PIPE

  • Spring Valley entered into separate subscription agreements with a number of investors, pursuant to which the Subscribers agreed to purchase, and Spring Valley agreed to sell to the Subscribers, an aggregate of 21,300,002 shares of Spring Valley Common Stock (the “PIPE Shares”), for an aggregate purchase price of $211,000,000, in a private placement (the “PIPE”). The PIPE is priced at $10/Share.
  • The closing of the sale of the PIPE Shares pursuant to the Subscription Agreements is contingent upon the concurrent consummation of the Proposed Transactions, and in the case of $30 million of the PIPE, entry into definitive documents between the investor, Fluor and NuScale with respect to certain commercial arrangements.
  • The transaction includes a $181 million oversubscribed, fully committed common stock PIPE is anchored by global financial and strategic investors such as Samsung C&T Corporation, DS Private Equity and Segra Capital Management, with participation by Spring Valley’s sponsor, Pearl Energy.
  • With the satisfaction of this contingency, the enhanced commitment by Samsung C&T brings commitments in the PIPE transaction to $211 million. – LINK
  • Total committed PIPE investment increased from $211 million to $221 million – LINK

LOCK-UP

  • In connection with the Closing, certain Initial Holders and certain investors in NuScale will agree not to transfer any shares of Spring Valley Common Stock held by them until 180 days after the closing date of the Merger.

SUPPORT LETTER AGREEMENT

  • Concurrently with the execution of the Merger Agreement, the Sponsor entered into the Sponsor Letter Agreement with Spring Valley and NuScale, pursuant to which the parties thereto agreed to
    • (i) certain vesting and forfeiture terms with respect to a certain percentage of the Acquiror New Class B Stock if Closing Acquiror Cash is less than $432 million
    • (ii) certain vesting and forfeiture terms with respect to up to 35% of Spring Valley Common Stock beneficially owned by the Sponsor immediately following the Closing
    • (iii) not to transfer, assign or sell any securities held by them subject to the lock-up provisions described therein or exercise any of their Spring Valley Warrants until the expiration of a certain applicable lock-up period (such lock-up provisions will apply also to certain permitted transferees of the Sponsor) and
    • (iv), if the Closing has not occurred before May 20, 2022, to allow for an extension of the Termination Date for a period of up to six months in exchange for a payment of $2,300,000 in exchange for 2,300,000 additional Spring Valley Warrants.

NOTABLE CONDITIONS TO CLOSING

  • The obligations of NuScale to consummate the Proposed Transactions are subject to the Closing Acquiror Cash equaling or exceeding $200,000,000.

NOTABLE CONDITIONS TO TERMINATION

  • The Merger Agreement allows the parties to terminate the Merger Agreement at any time prior to the Effective Time if the Proposed Transactions are not consummated by May 20, 2022, or such later date as may be mutually agreed by the parties (the “Termination Date”).

ADVISORS

  • Guggenheim Securities, LLC is acting as financial advisor to NuScale and Fluor.
  • Cowen is acting as financial advisor and lead capital markets advisor to Spring Valley.
  • Wells Fargo is acting as capital markets advisor to Spring Valley.
  • Guggenheim Securities, LLC and Cowen acted as placement agents to Spring Valley in connection with the PIPE offering.
  • Stoel Rives LLP is acting as legal counsel to NuScale
  • Gibson, Dunn & Crutcher LLP is acting as legal counsel to Fluor
  • White & Case LLP is acting as legal counsel to the placement agents and Kirkland & Ellis LLP is acting as legal counsel to Spring Valley.

The below-announced combination was terminated on 10/14/21.  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: AeroFarms [TERMINATED on 10/14/21 – LINK]

ENTERPRISE VALUE: $1,187 million
ANTICIPATED SYMBOL: ARFM

Founded in 2004, AeroFarms is widely recognized as the world leader in vertical farming. As a certified B Corporation and public benefit corporation since 2017, AeroFarms is on a mission to grow the best plants possible for the betterment of humanity. Through its innovative growing platform, AeroFarms helps solve issues brought on by macro challenges such as population growth, water scarcity, arable land loss, health consciousness, and supply chain risks like the COVID-19 pandemic. AeroFarms has developed patented and award-winning technology in areas such as plant biology, mechanical design, environmental control, data science, operations, and plant genetics.

Through the integration of these disciplines, AeroFarms achieves up to 390 times greater productivity per square foot annually versus traditional field farming while using up to 95% less water and zero pesticides. With over 250 invention disclosures and a vast library of data collected over 15 years of operations, AeroFarms is continually improving its systems to understand plants at unprecedented levels and solve agriculture-related supply chain issues.

Investment Highlights

  • Revolutionizing agriculture and has been innovating vertical farming for 15 years
  • $1.9 trillion total addressable market opportunity within its core leafy greens market and other adjacencies.
  • Proprietary technology and industry leadership with proven innovation and design evolution through five generations of farm models supported by an experienced team and a robust portfolio of over 250 invention disclosures.
  • Data science driven and fully-controlled technology platform enables AeroFarms to better understand plants and optimize farms, while improving quality and reducing costs.
  • Commercially selling leafy greens with a brand that is already winning at retail, providing customers with a premium product with superior quality, flavor, taste and texture.
  • Grown over 550 varieties of produce to date and working with key strategic partners to use its growing platform to address broader problems in agriculture.
  • Strong projected financial performance driven by demonstrated farm key performance indicators (KPIs) and an accelerated farm rollout schedule.

SUBSEQUENT EVENT – 8-K Link

On October 14, 2021, Spring Valley, Merger Sub, and the Company entered into a Termination Agreement (the “Termination Agreement”), effective as of such date, pursuant to which the parties agreed to mutually terminate the Merger Agreement. The termination of the Merger Agreement is effective as of October 14, 2021.

  • As a result of the termination of the Merger Agreement, the Merger Agreement will be of no further force and effect, and certain transaction agreements entered into in connection with the Merger Agreement, including, but not limited to:
    • (i) the Sponsor Support Agreement, dated as of March 25, 2021, by and among Spring Valley, the Company and SV Acquisition Sponsor Sub, LLC, a Delaware limited liability company and;
    • (ii) the Subscription Agreements, each dated March 25, 2021, between Spring Valley and certain investors.
  • These agreements will automatically either be terminated in accordance with their terms or be of no further force and effect.

TRANSACTION

  • Under the terms of the Merger Agreement, the transaction is valued at a fully diluted pro forma equity value of approximately $1.2 billion assuming no redemptions by Spring Valley shareholders
  • Transaction is expected to provide up to $357 million in gross proceeds to AeroFarms
    • Comprised of Spring Valley’s $232 million of cash held in trust, assuming no redemptions, and a $125 million fully committed PIPE

 

PIPE

  • $125 million fully committed PIPE at $10.00 per share
    • Includes investments from leading institutional investors, AeroFarms insiders, and Pearl Energy Investments, the sponsor of Spring Valley

SPONSOR EARNOUT

SPAC Sponsor Shares which are subject to vesting are as follows:

  • 250,000 shares will be subject to vesting based on a $12/share price target;
  • 250,000 founder shares will be subject to vesting based on a $14/share price target;
  • 500,000 founder shares will be subject to vesting based on a $15/share price target;
  • 500,000 founder shares will be subject to vesting based on a $20/share price target;

LOCK-UP AGREEMENTS

  • Initial holders and certain investors agree to a 180 day post closing date restriction on disposition for any shares

SUPPORT AGREEMENTS

  • Both sponsor and company have entered into agreements whereby parties agreed to all of their shares in favor of the proposed transaction

NOTABLE CONDITIONS TO CLOSING

  • Spring Valley must provide an amount of cash equal to or exceeding $225,000,000 at closing

NOTABLE CONDITIONS TO TERMINATION

  • Either party may terminate if the closing has not occurred on or before September 25, 2021

ADVISORS

  • J.P. Morgan Securities LLC is acting as exclusive financial advisor to AeroFarms.
  • Cowen is acting as a financial advisor to Spring Valley.
  • Cowen and Wells Fargo Securities are acting as capital markets advisors to Spring Valley.
  • J.P. Morgan Securities LLC, Cowen and Wells Fargo Securities acted as placement agents to Spring Valley in connection with the PIPE offering.
  • DLA Piper LLP (US) is acting as legal counsel to AeroFarms,
  • Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal counsel to the placement agents.
  • Kirkland & Ellis LLP is acting as legal counsel to Spring Valley.

SPRING VALLEY MANAGEMENT & BOARD

Executive Officers

Christopher Sorrells, 52
Chief Executive Officer and Director

Mr. Sorrells has been an investor, operator, advisor and board member in the Sustainability industry for over 20 years. Mr. Sorrells currently serves as Lead Director and Chairman of the Compensation Committee for Renewable Energy Group, Inc. (Nasdaq: REGI), having previously served as Vice Chairman of its board. Previously, Mr. Sorrells served as a Managing Director and then as an Operating Partner of NGP ETP, an affiliate of NGP, a leading energy private equity fund with $20 billion of assets under management, which he helped grow into one of the most successful Sustainability-focused private equity funds. Mr. Sorrells and/or his former firms including NGP ETP have invested in a broad range of companies across the Sustainability industry, including Renewable Energy Group, Inc. (Nasdaq: REGI), Power-One, Inc. (formerly Nasdaq: PWER), Caminus Corporation (formerly Nasdaq: CAMZ), Waste Resource Management, Inc., TPI Composites, Inc. (Nasdaq: TPIC) and others. In addition to leading investments, Mr. Sorrells has held a number of board positions for numerous public and private firms, including groSolar (which was later sold to EDF Renewables Inc.), GSE Systems, Inc. (Nasdaq: GVP) and Living Earth (which was later sold to Bain Capital Double Impact). As an operator, Mr. Sorrells has held a variety of senior executive leadership roles at Sustainability-focused companies including serving as Chief Operating Officer and Director of GSE Systems, Inc. Mr. Sorrells started his career in the energy, power and Sustainability industries as an investment banker at Salomon Smith Barney in 1996 and later at Banc of America Securities LLC where he created one of the first Sustainability-focused investment banking teams in 2000. Mr. Sorrells received his Master of Accounting from University of Southern California, an M.B.A. from The College of William and Mary and a B.A. from Washington and Lee University.

Jeffrey Schramm, 50
Chief Financial Officer

Mr. Schramm has over 20 years of leadership, finance and operations experience in advanced materials and specialty chemical organizations with a deep understanding of the Sustainability industry having worked with some of the leading venture capital and private equity funds such as Kleiner Perkins, Index Ventures and NGP Energy Technology Partners. Previously, Mr. Schramm served as Chief Financial Officer at Lehigh from 2009 until 2019 where he was responsible for raising both debt and equity, as well as financial and administrative functions. Mr. Schramm was instrumental in Lehigh’s sale to a publicly traded company and largest tire manufacturer in Europe, Michelin, as the key part of its sustainability initiative. Prior to that, Mr. Schramm served as Vice President of Finance for Euramax International, Inc. (now OmniMax International, Inc.) in the Exterior Products & Fabral (fabrication) divisions from 2007 until 2009 where he managed a large multilocation team supporting revenues close to $1 billion annually. From 2000 to 2007, Mr. Schramm was with Kemira Chemicals, Inc. (formerly Vulcan Performance Chemicals) as head of Financial Planning & Analysis and North American CFO over the Pulp & Paper and Water Treatment specialty chemical businesses. During his time at Kemira Chemicals, Inc., he was a key member of the acquisition team acquiring the Pulp & Paper chemicals business from Lanxess (LXS.DE) and the Pulp & Paper business from FinnChem USA. In 1993 to 2000, Mr. Schramm began his career at Milliken & Company in various roles starting in Accounting, Controllership and later served as Financial Planning & Analysis Manager in Procurement. Mr. Schramm earned a B.S. in Corporate Finance and Investment Management from the University of Alabama, and an M.B.A from LaGrange College.

Robert Kaplan, 47
Vice President of Business Development

Mr. Kaplan has over 20 years of investment banking experience in the Sustainability industry. Mr. Kaplan has been involved in over 60 transactions totaling approximately $6 billion in transaction value. Mr. Kaplan was most recently Managing Director of Clean Technologies / Renewables at Stifel. In this role, Mr. Kaplan was responsible for the firm’s capital markets and advisory services in various sustainability subsectors, including, clean energy, biofuels, energy storage, energy efficiency, mobility and environmental technologies. He joined Stifel in 2010 in connection with Stifel’s acquisition of TWP in 2010. Mr. Kaplan joined TWP in 2007 as a Vice President in the Technology investment banking group with a focus on sustainable technologies. Prior to joining TWP, Mr. Kaplan started his investment banking career at First Albany where he was a founding member of one of the first Sustainability focused banking franchise on Wall Street. During his tenure at First Albany, he completed many of the industry’s first public offerings in various sustainability subsectors, such as solar, alternative fuels, mobility, fuel cells and the smart grid. Mr. Kaplan serves on the board of directors of TWO NIL, LLC. Mr. Kaplan received a B.S. in Finance from Lehigh University and an M.B.A. from the NYU Stern School of Business.

 

Board of Directors

William Quinn, 49
Chairman and Director

Mr. Quinn has over 25 years of private equity investment experience and has been involved in transactions totaling in the multi-billion dollars in aggregate value. Currently, Mr. Quinn is the Managing Partner of Pearl, an investment firm with $1.2 billion of committed capital under management that he founded in 2015. Prior to founding Pearl, Mr. Quinn served as a Co-Managing Partner of Natural Gas Partners. During his time at NGP, the firm raised funds totaling over $10 billion in cumulative committed capital, made multiple investments in the upstream, midstream and oilfield service and created a dedicated sustainable technology investment platform, NGP Energy Technology Partners. Mr. Quinn was a key contributor to the formation of NGP ETP in 2005 and served on its investment committee until 2013, during which time he oversaw their investments in the Sustainability, oil and gas, power, environmental, energy efficiency and clean energy subsectors, including Renewable Energy Group, Inc. (Nasdaq: REGI) and TPI Composites, Inc. (Nasdaq: TPIC), a global leader in wind blade manufacturing. Prior to joining NGP, Mr. Quinn worked at Rainwater, Inc. and Hicks, Muse, Tate and Furst, Inc. and worked as an analyst in the investment banking divisions of Bear Stearns & Co. and BT Securities Corporation. Mr. Quinn has served on the board of directors of numerous public and private companies, including Resolute Energy Corporation (NYSE: REN), which was taken public via Hicks Acquisition Company I in 2009 and subsequently sold to Cimarex Energy Co. (NYSE: XEC) in early 2019, and Eagle Rock Energy Partners, L.P. (Nasdaq:EROC). In addition to his investing activities, Mr. Quinn serves on the Board of Overseers of the Wharton School of the University of Pennsylvania and serves as a guest lecturer on private equity investing at Stanford University’s Graduate School of Business and the Wharton School of the University of Pennsylvania. Mr. Quinn received a B.S.E. in Finance from the Wharton School of the University of Pennsylvania, and an M.B.A. from the Stanford University Graduate School of Business.

Debora Frodl, 55
Director

Ms. Frodl has over 30 years of international business experience with General Electric Company. From 2012 to 2017, Ms. Frodl served as the Global Executive Director of Ecomagination. Ms. Frodl repositioned this sustainable technology strategy into one of multi-faceted innovation and expansive global growth. During Ms. Frodl’s tenure from 2012 to 2017, GE Ecomagination’s revenues exceeded $125 billion. From 2010 to 2012, Ms. Frodl served as GE’s Chief Strategy Officer and Global Alternative Fuels Leader where she pioneered the business strategy to decarbonize the commercial fleet industry through alternative fuel vehicles and infrastructure technologies. From 2005 to 2010, Ms. Frodl served as Chief Commercial Officer of GE Capital Fleet Services, from 2004 to 2005, as Chief Marketing Officer of GE Capital Commercial Equipment Finance and from 2002 to 2004, as Chief Executive Officer of GE Capital Dealer Finance. From 1999 to 2004, Ms. Frodl served as Chief Executive Officer of GE Capital Public Finance. Currently Ms. Frodl serves on the board of directors for Renewable Energy Group, Inc. and ITC Holdings Corp. and Chair of the board for XL Hybrids, a leader in smart vehicle electrification for commercial fleets. Ms. Frodl has been recognized by Green Building & Design as 2017 “Woman in Sustainability Leadership,” Women’s Council on Energy and the Environment as 2014 “Woman of the Year,” Connected World Magazine as 2013 “Top Women in M2M.” She holds an M.B.A. from the University of St. Thomas and BSBA from Minnesota State University.

Richard Thompson, 71
Director

Mr. Thompson has over 35 years of international business experience in renewable energy, power electronics and semiconductors, including several billion-dollar public exits in the Sustainability industry. Currently, Mr. Thompson is a strategic adviser to Sumeru Equity Partners, a technology-focused private equity firm. From 2014 to 2016, he was Executive Chairman of AVI-SPL, an approximately $580 million privately held, global leader in video communications. From 2008 to October 2013, Mr. Thompson was President, Chief Executive Officer and a Director of Power-One, Inc. (formerly Nasdaq: PWER), a leading provider of renewable energy and power conversion solutions. During his tenure, he successfully led the company through restructuring to become one of the largest renewable energy inverter suppliers worldwide, generating over $1 billion in sales in 2012, along with its sale to ABB (NYSE: ABB) for over $1 billion in equity value. Prior to joining Power-One, Inc., Mr. Thompson was Chief Financial Officer of American Power Conversion Corporation (Nasdaq: APCC) from 2005 to 2007, which was acquired in March 2007 by a French competitor, Schneider Electric SA (Paris: SU.PA), in an auction for approximately $6 billion in enterprise value. From 1997 to 2005, Mr. Thompson was Chief Financial Officer of Artesyn Technologies (Nasdaq: ATSN) and was instrumental in creating one of the leading power component companies in the industry which was later sold to Emerson (NYSE: EMR) for $500 million. In addition to his role at Artesyn, he was also General Manager of Spider Software and led the company’s merger with Zytec Inc. that created a robust power component and computer board business.

Patrick Wood, III, 58
Director

Mr. Wood has over 25 years of experience in the development, financing, regulation, and the legal and policy issues of energy infrastructure. Currently, Mr. Wood serves as CEO of the Hunt Energy Network, a distributed energy platform company, since February 2019. Known for his role in setting up competitive energy markets in Texas and across the country, Mr. Wood served as Chairman of both the Public Utility Commission of Texas from 1995 to 2001 and the Federal Energy Regulatory Commission from 2001 to 2005. Since leaving public service, he has focused on developing energy infrastructure projects and companies. He currently serves as a director of SunPower (Nasdaq: SPWR) and of Quanta Services, Inc. (NYSE: PWR), including his recent appointment to Luma Energy, overseeing the Quanta-ATCO joint venture to operate the Puerto Rico utility system. Mr. Wood served as board chairman of independent power producer Dynegy from its emergence from bankruptcy in 2012 through its merger with Vistra Energy in 2018 for $1.7 billion in an all stock deal, creating a $10 billion publicly traded equity valued company upon closing. He was a strategic advisor to Natural Gas Partners from 2005 to 2014, when he became an independent director of Memorial Resources Development (Nasdaq: MRD) upon its IPO in 2014. MRD was subsequently sold to Range Resources in 2016 for $4.2 billion in enterprise value. Mr. Wood was also a past director of TPI Composites, Inc. (Nasdaq: TPIC) and has prior affiliations with InfraREIT (NYSE: HIFR), Airtricity, First Wind, Texas Genco, The Texas A&M Smart Grid Council, the American Council on Renewable Energy, and remains a member of the National Petroleum Council.



ByRoman Developer