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NuScale Announces Plans to Go Public; Value Set at $1.9 B

Dan Yurman's picture
Editor & Publisher, NeutronBytes, a blog about nuclear energy

Publisher of NeutronBytes, a blog about nuclear energy online since 2007.  Consultant and project manager for technology innovation processes and new product / program development for commercial...

  • Member since 2018
  • 1,600 items added with 1,249,486 views
  • Dec 14, 2021
  • 744 views
  • NuScale Announces Plans to Go Public
  • Small Modular Reactor Market to Reach $18.8 Billion by 2030

NuScale Announces Plans to Go Public; Value Set at $1.9 B

The transaction is expected to provide gross proceeds of up to $413 million to bolster and accelerate the commercialization of NuScale’s Small Modular Reactor (SMR)  technology

Nuscale-Logo(Horizontal_BlueTM)wTagNuScale Power, LLC (“NuScale”) has entered into a business combination agreement (merger) with Spring Valley Acquisition Corp. (NASDAQ: SV)

The combined company, which will be named NuScale Power Corporation, will have an estimated pro-forma enterprise value of approximately $1.9 billion and will be listed under the ticker symbol “SMR” upon closing.

The transaction includes a $181 million oversubscribed, fully committed common stock PIPE 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

The transaction is expected to provide gross proceeds of up to $413 million to bolster and accelerate the commercialization of NuScale’s SMR technology

Fluor (NYSE: FLR) projects to control approximately 60% of the combined company and remain an important partner providing NuScale with engineering services, project management, administrative and supply chain support.

Assuming the “pro-forma enterprise value” ($1.9B) of the new firm is retained, Fluor’s stake will be worth at closing will be an estimated $1.14 billion.

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.

About Spring Valley Acquisition Corp.

Spring Valley Acquisition Corp. (NASDAQ: SV) is a special purpose acquisition company formed for the purpose of entering into a merger or similar business combination with one or more businesses or entities focusing on sustainability, including clean energy and storage, smart grid/efficiency, environmental services and recycling, mobility, water and wastewater management, advanced materials and technology enabled services.

Spring Valley’s sponsor is supported by Pearl Energy Investment Management, LLC, a Dallas, Texas based investment firm that focuses on partnering with best-in-class management teams to invest in the North American energy industry.

& & &

Small Modular Reactor Market to Reach $18.8 Billion by 2030

The nuclear trade press wire service Power Engineering reports reports that according to a new report by Valuates Reports, the global small modular reactor market is projected to grow at a Compound Annual Growth Rate of 15.8%. The report projects the small modular reactor market to reach $18.8 billion by 2030, up from $3.5 billion in 2020.

According to the findings, there are multiple factors driving this growth.

  • Ontario Power Generation to deploy GE Hitachi small modular reactor tech
  • Rolls-Royce secures funding for SMR nuclear technology

Key players of the global small modular reactor market analyzed in the research include Fluor Corporation, Brookfield, General Atomics, Holtec International, Mitsubishi Heavy Industries, General Electric, Rolls Royce Plc, Terrestrial Energy, TerraPower LLC, and X Energy LLC.

According to Valuates’ findings, the growing demand for electricity, as well as the flexibility of mall modular reactors in terms of size and power output, are further fueling the market.

Increase in demand for power generation in remote locations, adaptability of small modular reactors, and ease of construction due to factory fabrication fuel the global small modular reactor market growth. On the other hand, investments directed toward renewable energy hamper the market. On the contrary, decarbonization of energy sector creates several lucrative opportunities.

Governments across the world want to see SMRs fully deployed in order to lessen their reliance on fossil fuels. COVID-19 has increased the pace of market advancements by focusing more on nuclear energy technology, which in turn is expected to drive the growth of the SMR market.

According to the report, the global small modular market is likely to increase due to the comparably cheap cost and time required for building SMRs. It notes that compared to a wind or solar farm, SMR facilities take up a relatively smaller area, resulting in a small footprint.

Older generation nuclear reactors are vast in size and need a significant amount of capital and construction time. The report says nuclear reactors are challenging to deploy in areas far from power grid systems. As a result, putting up a nuclear reactor in remote areas is not practical, paving the way for the creation of smaller nuclear reactors.

The report goes on to say the Small Modular Reactor market is being driven by the increasing need for flexible power generation, along with the world’s transition from a fossil-fuel-based energy system to a net-zero-emissions one. SMRs are seen as a very promising alternative for providing both baseload and flexible operations together with renewables.

They can run at high capacity while also satisfying the demand for production rate flexibility and creating energy services, ancillary services, and low-carbon co-products when SMRs and renewable energy are combined into a single energy system and connected through smart grids.

The report also notes that the United States accounted for the highest small modular reactor market share in 2020 and is also the fastest expanding region followed by the UK.

# # #

Discussions
Bob Meinetz's picture
Bob Meinetz on Dec 14, 2021

"Spring Valley Acquisition Corp. (NASDAQ: SV) is a special purpose acquisition company formed for the purpose of entering into a merger or similar business combination with one or more businesses or entities focusing on sustainability, including clean energy and storage, smart grid/efficiency, environmental services and recycling, mobility, water and wastewater management, advanced materials and technology enabled services."

Spring Valley’s sponsor is supported by Pearl Energy Investment Management, LLC, a Dallas, Texas based investment firm that focuses on partnering with best-in-class management teams to invest in the North American energy industry."

What is "Pearl Energy Investment Management"?

"Founded in 2015, Pearl Energy Investments is a private equity firm based in Dallas, Texas. The firm seeks to make small and middle-market investments in the North American upstream, midstream, and oilfield service sectors."

Who is William (Billy) Quinn, Chairman of the Board of Spring Valley Investments?

"Mr. William J. Quinn has served as a member of our Board of Directors since November 2020.  Mr. Quinn is the founder and Managing Partner of Pearl Energy Investments (Pearl), a $1.2 billion private equity fund focused on energy. Prior to founding Pearl, Mr. Quinn served as Managing General Partner of Natural Gas Partners (NGP), a leading energy private equity fund with $20 billion of cumulative equity commitments."

Dan, this deal has all the telltale signs of a killer acquisition:

"Large companies often acquire other firms to benefit from their products, or to snap up their talent. But in some cases, it appears, an acquisition is made to destroy the potential competition presented by the smaller company. After such 'killer acquisitions,' the larger firm simply shelves the competing innovative projects before they are marketed."

Would oil companies really undertake such drastic steps, just to stifle competition? Of course. Not only would they do it, it's become somewhat of a specialty - as was the case when Texaco-Chevron purchased the patents to the first promising incarnation of an electric car battery. Ask Stanley Ovshinsky, its inventor:

In an interview with The Economist, Ovshinsky subscribed to the former view. "I think we at ECD made a mistake of having a joint venture with an oil company, frankly speaking. And I think it's not a good idea to go into business with somebody whose strategies would put you out of business, rather than building the business."[28] 

This deal stinks.

Dan Yurman's picture
Thank Dan for the Post!
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