Strategic Materials

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MP Materials - >>> Rare earth materials producer MP Materials to be listed via merger with blank-check company Fortress Value Acquisition


MarketWatch

July 15, 2020

By Ciara Linnane


https://www.marketwatch.com/story/rare-earth-materials-producer-mp-materials-to-be-listed-via-merger-with-blank-check-company-fortress-value-acquisition-2020-07-15?siteid=yhoof2&yptr=yahoo


Rare earth materials producer MP Materials has agreed to merge with special purpose acquisition corporation (SPAC) Fortress Value Acquisition Corp. FVAC, -2.95% to become a New York Stock Exchange listed company. MP Materials, which produces rare earth materials used in electric cars, wind turbines, defense systems and other technologies, will have a post-transaction equity value of about $1.5 billion and will have $500 million in cash to fund growth. The company's current owners, JHL Capital Group and QVT Financial, will roll 100% of their equity holdings into the combined company. A SPAC, or blank-check company, is one that has no defined business until it acquires one or more. The vehicle has become a popular way for companies to go public without the burden of a full initial public offering. "We believe MP Materials is a compelling opportunity to invest in an irreplaceable, world-class asset at a point in time when demand from electric vehicles, wind turbines, and other technologies is hitting an inflection point, and while the need to find a reliable and resilient source for rare earths is crucial for the U.S. and global supply chain," said FVAC CEO Drew McKnight, who will serve on the new company's board. Most rare earth production is sourced from China. The Mountain Pass, Calif.-based MP Materials is expected to generate more than $100 million revenue in 2020. Proceeds of the deal will be used to fund a plan to retrofit and fully recommission its refining facilities and to pursue downstream opportunities in the magnetic industry. Shares soared 26% in premarket trade.

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