Energy Fuels Inc. (Energy Fuels (UUUU)) is going all in on rare earths. The company announced Tuesday it will acquire VAC, a rare earth magnet manufacturer, in a cash-and-stock deal valued at roughly $1.9 billion. The stock slipped in premarket trading, but the strategic logic is clear: Energy Fuels wants to own the entire rare earth supply chain, from mining to finished magnets.
The deal combines Energy Fuels' mining, processing, and refining assets with VAC's permanent-magnet manufacturing business. Think of it as connecting the dots between digging rare earths out of the ground and putting them into the motors that power electric vehicles, drones, and data center cooling fans.
The Deal Mechanics
Energy Fuels will acquire 100% of Vacuumschmelze GmbH & Co. KG, Ara VAC TopCo US LLC, and their subsidiaries from private equity firm Ara Partners. The price tag: $718 million in cash plus 65.853 million newly issued Energy Fuels shares, based on the company's June 22 closing price of $16.12 per share.
To help fund the cash portion, Energy Fuels has a conditional commitment for up to $725 million from the U.S. Office of Strategic Capital. That money is earmarked for expanding the White Mesa Mill in Utah and building a planned American Metals Plant. The company also secured a $250 million term loan from Goldman Sachs to refinance some of VAC's debt. VAC itself holds a $41 million U.S. Department of War grant for a domestic metal-making facility.
As of March 31, Energy Fuels had $108.4 million in cash on hand.
Why VAC?
VAC isn't some startup. The company has more than 100 years of production experience, over 400 patents, and more than 1,000 customers. Its facilities span North America, Europe, and Asia. The crown jewel is its Sumter, South Carolina, plant, which can already produce 2,000 tonnes of permanent magnets annually and has room to scale to 12,000 tonnes.
The combined company will target customers in automotive, aerospace and defense, robotics, data centers, electronics, and industrial automation. VAC's customer pipeline for permanent magnets represents more than $2 billion in potential annual revenue. Energy Fuels expects the deal to immediately add to cash flow and margins.
“This is a transformational moment for Energy Fuels and the global rare earth supply chain,” said CEO Ross Bhappu. “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.”
Stock Technicals: Consolidation After a Big Run
Energy Fuels shares have had a remarkable year, up 194% over the past 12 months. But the stock has entered a consolidation phase after strong gains earlier this year. It hit its 52-week high in January and another notable swing high in May, but recent rallies have attracted sellers.
The short-term trend has weakened. The stock is trading 5.4% below its 20-day simple moving average (SMA) and 14.6% below its 200-day SMA. The relative strength index (RSI) sits at 46.23, a neutral reading that leans slightly bearish. An RSI in the mid-40s often points to choppy trading rather than a sustained uptrend.
The moving averages tell a mixed story. The 20-day SMA is below the 50-day SMA, signaling near-term weakness. But the 50-day SMA remains above the 200-day SMA, keeping the longer-term “golden cross” from July 2025 intact. So the broader uptrend is still alive, even if the short-term picture is messy.
Key levels to watch:
- Resistance: $16.50, near the 20-day exponential moving average (EMA) of $16.49. This could cap any rebound.
- Support: $13.50, well above the 52-week low of $5.33. This could act as a floor if selling continues.
In premarket trading Tuesday, Energy Fuels shares were down 3.41% at $15.57.
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