Energy Fuels buys VAC for $1.9B to create Western rare earth magnet giant

Energy Fuels Inc. agreed to acquire Vacuumschmelze GmbH from Ara Partners for about $1.9 billion in cash and stock, creating the first fully integrated Western rare earth supply chain from mine to finished magnet.

"This is a transformational moment for Energy Fuels and the global rare earth supply chain," said Ross Bhappu, president and chief executive officer of Energy Fuels. "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 $1.9 billion equity value comprises $718 million in cash and 65.85 million newly issued Energy Fuels common shares, valued at the company's closing price of $16.12 on June 22. Energy Fuels will also assume $140 million of VAC's adjusted net debt. Ara Partners, the selling private equity firm, will own 19.9% of the combined company after closing and receive a board seat. The deal is expected to close in early 2027, subject to foreign investment, antitrust and other regulatory approvals.

The acquisition positions Energy Fuels to capture surging demand for rare earth permanent magnets across North America and Europe, where the International Energy Agency projects demand will grow more than 50% over the next decade. VAC, a German advanced magnetics company with more than 100 years of production expertise and over 400 patents, operates magnet facilities in Germany, Finland, Slovakia and South Carolina. Its Sumter, South Carolina plant — the largest permanent magnet facility of scale in the U.S. — has an existing capacity of 2,000 tonnes per annum and a pathway to scale to 12,000 tpa.

Vertical Integration From Mine to Magnet

Energy Fuels' strategy links VAC's downstream magnet manufacturing with its upstream rare earth assets, including the White Mesa Mill in Utah — the only fully licensed conventional uranium processing facility in the U.S. — where the company also produces advanced rare earth products. The combined platform will draw feedstock from the shovel-ready Donald Project in Australia, expected to receive a positive final investment decision in early Q3 2026 and begin production in 2028.

The company plans to expand White Mesa Mill's separation capacity to 6,000 tonnes per annum of neodymium-praseodymium oxide by mid-2029, supported by a conditional $725 million, 20-year loan from the U.S. Office of Strategic Capital. Energy Fuels is also pursuing a planned acquisition of Australian Strategic Materials Ltd., which would add commercial-scale metals and alloys capacity in South Korea and a planned facility in the U.S.

Financial Profile and Growth Trajectory

VAC's legacy business generated $29 million of adjusted EBITDA in 2025, with its order book growing more than 20% year-on-year for 2026. The Sumter Facility alone is expected to generate $65 million to $75 million in annual run-rate EBITDA once it reaches its current 2,000 tpa capacity, with potential to reach $130 million to $140 million at 4,000 tpa and about $400 million if fully scaled to 12,000 tpa.

Energy Fuels has secured a $250 million term loan commitment from Goldman Sachs to refinance certain of VAC's existing debt. VAC also holds a $41 million grant from the U.S. Department of War for building a metal-making facility in the U.S.

VAC's customer base spans more than 1,000 accounts across automotive, aerospace, defense, robotics, data centers and industrial automation, with partnerships averaging more than 30 years for its largest customers. The company has secured a contract with the Defense Logistics Agency to supply neodymium-iron-boron blocks for the national defense stockpile, with production starting this year.

This article is for informational purposes only and does not constitute investment advice.