Valued at $1.2 billion! Nuclear energy company HGP plans to go public through SPAC for “flexible power supply” for AI data centers

The Zhitong Finance App learned that, according to people familiar with the matter, HGP Intelligent Energy plans to go public through a special purpose acquisition company (SPAC), and the deal valued the nuclear energy service company at about 1.2 billion US dollars.

The Dallas, Texas-based company will merge with Meshflow Acquisition Corp. (MESH.US), and the proceeds from the deal will be used to commercialize its technology. The company's technology aims to enable nuclear reactors to flexibly adjust power according to real-time fluctuating electricity demand in artificial intelligence (AI) data centers. People familiar with the matter also said that the company will also provide the same peak shifting service for local power grids.

HGP and MeshFlow spokespersons declined to comment.

According to people familiar with the matter, the merged entity will be renamed Leyte Parent Inc., and the deal may be announced as early as Tuesday local time.

It is reported that HGP's software and coolant pump system can enable nuclear reactors to track electricity flow in real time, thereby improving operation efficiency. According to an HGP internal memorandum, AI data centers usually lose about $10,000 to more than $100,000 per megawatt-hour of electricity (“load” in industry terminology).

For a long time, large nuclear power plants have continued to output gigawatts of electricity with stable power around the clock, while power plants that mainly burn fossil fuels have adjusted the amount of power generation to accurately match supply and demand. Today, next-generation nuclear power projects are striving to be more flexible, able to respond quickly to load changes and provide zero-carbon energy.

As grid access faces years of delays, power developers are racing to find fast power supply solutions for AI plants — which consume as much electricity as an entire city. At the same time, data centers are facing increasing opposition pressure from the public, the political community, and regulatory levels due to disturbing problems such as excessive consumption of electricity and water resources, driving gas emissions from high-temperature rooms, increasing rising electricity bills, and generating noise.

Bartosz Lipinski, Chairman and CEO of Meshflow, said in the memorandum: “HGP is focusing on a key part of this opportunity — its technology can make existing and next-generation nuclear reactors more flexible and create greater value in the power grid. We believe this transaction will provide HGP with the resources needed for large-scale commercial promotion, while also enabling MeshFlow's shareholders to participate in investing in the key support link of AI-driven energy construction in the US.”

Meshflow is headquartered in Chicago and raised $345 million through a Nasdaq IPO in December last year. At the time, the SPAC company said it would seek mergers with companies in the fields of AI infrastructure, energy, and digital assets.

CEO Lipinski worked for Citadel, and its Chief Strategy Officer Alex Dymala-Dolesky is the founder of Uranium Digital, a uranium trading platform. HGP CEO Gregory Forero was the former vice president of Constellation Energy Corp. (CEG.US) and was the head of UBS Group's energy derivatives business.

Wall Street veteran Jeffrey Frase will join the new company's board of directors, according to people familiar with the matter. He has worked in the commodities trading division of J.P. Morgan Chase, Lehman Brothers, and Goldman Sachs.

In July of this year, HGP, along with Microsoft (MSFT.US), Nvidia (NVDA.US) and other companies, were selected for the US Department of Energy's “Prometheus” project, which aims to speed up the deployment process of nuclear reactors and improve operational efficiency.

In addition, HGP is also advancing a plan to use reactors on decommissioned US Navy ships to power data centers in the form of long-term power purchase agreements at sites belonging to the federal government.

Cantor Fitzgerald & Co. acted as HGP's financial and capital markets advisor, and Pillsbury Winthrop Shaw Pittman LLP acted as its legal counsel.