business
Energy Fuels to Buy Vacuumschmelze for $1.9 Billion as Shares Drop
Energy Fuels agreed to buy Germany's Vacuumschmelze from Ara Partners in a $1.9 billion cash-and-stock transaction. The deal gives Ara Partners a roughly 20% stake in Energy Fuels and one board seat.
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Cnbc reported that Energy Fuels will acquire Germany's Vacuumschmelze from Ara Partners in a $1.9 billion cash-and-stock deal. The transaction will make Energy Fuels one of the largest non-Chinese producers of magnets used in aerospace, defense and renewable energy. Energy Fuels will pay Ara Partners $718 million in cash and issue 65.853 million newly issued common shares.
Ara Partners will hold about 20% of Energy Fuels shares after closing and receive one seat on the board. The deal is scheduled to close early next year. Energy Fuels shares fell as much as 6.2% in premarket trading on the announcement and were last down 2.3%.
Vacuumschmelze employs 3,600 workers. Its chief executive, Erik Eschen, will remain in his role. Ross Bhappu, who became chief executive of Energy Fuels in April, said the company chose to buy an established producer rather than build its own magnet business.
"This is not an easy business to get into. It's not an easy one to understand," Bhappu said. " Energy Fuels plans to retain the Vacuumschmelze brand and keep existing plants open, including the facility in China.
The company also intends to expand the plant that opened in South Carolina late last year, Bhappu said.
