Portland nuclear power company NuScale Power LLC is expected to start trading as a public company May 3 following a special shareholder meeting Thursday of the publicly traded blank check company with which it's merging.
Shareholders of Texas-based Spring Valley Acquisition Corp. (Nasdaq: SV) approved the business combination, a merger between NuScale and the special purpose acquisition company Spring Valley. The transaction is expected to close May 2 and raise $380 million.
A SPAC raises money from investors and goes public as a shell company, then targets a private company to merge with and take public.
At $380 million, the amount raised is less than the company was initially hoping to garner when it announced the deal but is above the $200 million threshold required for the deal to be completed. These proceeds are a combination of the money held in trust by the SPAC while it looked for a deal and a finance vehicle called private investment in public equity, or PIPE.
The PIPE is used to bolster deals against redemptions of shares from SPAC shareholders prior to closing. NuScale and Spring Valley have added to the PIPE since the deal was announced and grabbed an added $55 million, including $15 million from steelmaker Nucor Corp.
Prior to the shareholder meeting, Spring Valley had about 37% of outstanding ordinary shares redeemed. According to the site SPAC Insider, this is the second-best vote of the year for 33 SPAC completion votes of 2022. This is notable as SPAC deals have started to lose their luster after a boom over the last two years.
Once the deal closes, the combined company will change its name to NuScale Power Corp. It will trade on the New York Stock Exchange under the ticker “SMR.”
This deal has hit one challenge. On April 25, a group of five NuScale common stock shareholders — all former employees — filed a lawsuit challenging changes made by the company to its operating agreement as part of the merger that would convert preferred shares of the company to common shares at a ratio that is more than 1:1. They claim the change will dilute their shares and cost them up to $90 million.
“We are obviously disappointed and also surprised that Spring Valley is moving forward without a resolution of our claims, in light of the serious contract issues and amount of money at stake,” said Timothy DeJong, attorney at Stoll Berne representing the plaintiffs. “Our clients are not backing off their claims seeking relief on behalf of all common unit holders and optionees, which have been cast aside without any meaningful consideration.”
The plaintiffs have demanded a jury trial.
The company offered this statement on the suit: "NuScale believes the claims have no merit and we will vigorously defend ourselves in the appropriate forum."
NuScale was founded in 2007 and has roots at Oregon State University. It is an advanced nuclear power company that makes a small modular reactor, or SMR, that it says offers several advantages over conventional nuclear.
Once this deal is completed, it will be the third SPAC merger to take an Oregon company public. Last year, grid-scale battery maker ESS Inc (NYSE: GWH) and vacation rental property management company Vacasa (Nasdaq: VCSA) both made their market debuts.
