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Fluor's (FLR) NuScale Unit to go Public Through SPAC Deal

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Fluor Corporation (FLR - Free Report) rose 3.96% during the trading session on Dec 14 and 1.11% in the after-hours trading session after the company’s NuScale Power, LLC entered into a merger agreement with Spring Valley Acquisition Corp. , by which its nuclear energy unit can go public. The deal is expected to close in first-half 2022, subject to customary closing conditions.

With the closure of this deal with Spring Valley, a special purpose acquisition company or SPAC company, Fluor expects to control 60% of the combined company. The new company will be named NuScale Power Corporation, marking the first and the only publicly-traded company with a focus on the development of advanced small modular nuclear reactor or SMR technology. Notably, it will list on the Nasdaq under the ticker symbol "SMR".

Fluor highlighted that the deal with Spring Valley would provide NuScale with $413 million in gross proceeds. This includes a private investment in public equity (PIPE) of about $181 million anchored by Samsung C&T Corporation, DS Private Equity, Segra Capital Management and Pearl Energy.

NuScale is a leader in the development of light water, passively safe SMRs. Fluor has spent more than $600 million in NuScale since 2011 for bringing its technology to the market. NuScale aims to utilize the funds from the deal to step up commercial products, comprising the SMR technology. It also expects the proceeds to help it become cash flow positive.

Fluor, being an industry leader in nuclear remediation at government facilities throughout the United States, is expected to benefit from the rising demand for energy across the globe. With global electricity demand on a steady rise, nuclear energy is emerging as one of the best alternatives to the world’s dependence on a finite oil supply and subsequent environmental degradation.

For the first nine months of 2021, NuScale received $193 million in outside investments. These investments accelerated NuScale's path to commercialization and demonstrated third-party investor interest in NuScale's business prospects. The company expects NuScale to be an important part of its vision of providing a wide array of carbon-free environmental solutions.

Related to pro-green initiatives, Fluor received its first SMR cost-reimbursable services contract from Utah Associated Municipal Power Systems in January 2021 to provide estimating, development, design and engineering services for its Carbon-Free Power Project.

Share Price Performance

Shares of Fluor have climbed 53% this year, outperforming the industry's 31.5% growth. Continuous contract wins, strong end-market prospects and a good business portfolio mix are expected to benefit the company.

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Zacks Rank

Fluor currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Beazer Homes has gained 43.5% year to date (YTD). Earnings are expected to grow 23.7% in fiscal 2022.

Meritage Homes Corporation (MTH - Free Report) currently sports a Zacks Rank #1. Based in Scottsdale, AZ, Meritage Homes is one of the leading designers and builders of single-family homes. Its focus on entry-level LiVE.NOW homes has been a major driving factor.

Meritage Homes has gained 38.9% YTD. Earnings are expected to grow 74.4% in 2021 and 22.2% in the next.

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