Energy Fuels has entered into a definitive agreement to acquire 100% of Vacuumschmelze, Ara VAC TopCo US and their consolidated subsidiaries (collectively known as VAC) from Ara Partners for nearly $1.9bn in a cash-and-stock transaction.
The deal will establish a fully integrated platform for strengthening critical rare earth element (REE) supply chains globally.
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The agreement includes customary closing conditions and regulatory approvals, with completion targeted for early 2027.
VAC, a manufacturer of permanent magnets with facilities in North America, Europe and Asia, will become a wholly owned subsidiary of Energy Fuels, retaining its brand and headquarters in Hanau, Germany.
The company operates a magnet production facility in Sumter, South Carolina, US, with an annual capacity of 2,000t of permanent magnets, scalable to 12,000t.
Its product portfolio includes neodymium-iron-boron and samarium-cobalt permanent magnets as well as soft magnetics for industrial and electrification applications.
Through the combination, Energy Fuels expects to establish a fully integrated supply chain for REEs.
Energy Fuels will contribute to upstream mining projects and separation facilities, while VAC brings downstream expertise in magnet manufacturing.
The combined entity is positioned to serve sectors such as automotive, defence, robotics and data centres in North America, Europe and Asia.
Energy Fuels president and CEO Ross Bhappu said: “Together with VAC, we will strengthen global rare earth and magnet supply chains, providing a reliable, secure and diversified source of critical materials from mines to highly valued permanent magnets.”
The transaction consideration includes $718m in cash and the issuance of 65.853 million new Energy Fuels shares to Ara Partners.
If the share price falls below $20.93 per share at closing, Ara Partners will also receive up to $135m in newly issued preferred shares.
Upon completion, Ara Partners will hold 19.9% of Energy Fuels, with rights to nominate a director to the board.
To support the refinancing of certain VAC debt, Energy Fuels has secured a $250m term loan commitment from Goldman Sachs.
Goldman Sachs and Jefferies acted as financial advisors for Energy Fuels and VAC, respectively.
Legal counsel was provided by Dentons Canada, Dorsey & Whitney, and Herbert Smith Freehills Kramer for Energy Fuels, and by Latham & Watkins for VAC.
