USA Rare Earth Completes $2.8 Billion Serra Verde Acquisition

M&A · PartnershipCommodityIndustry Impact 4
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Summary · why it matters

USA Rare Earth has completed its $2.8 billion acquisition of Serra Verde, a Brazil-based mining company that is the only scaled producer of the core four rare-earth elements in the Western Hemisphere. The company projects that the newly integrated Serra Verde business will achieve an annualized run rate for EBITDA between $550 million and $650 million by the end of next year, and that its combined businesses will reach approximately $1.8 billion in adjusted EBITDA in 2030, up from just $5.8 million in second-quarter revenue and a $46.3 million operating loss. The U.S. government holds a roughly 10% equity position in USA Rare Earth that could rise to as much as 16% through stock warrants, and the Department of Defense provided $750 million in direct investment in a special-purpose vehicle that also included a $500 million credit facility from a Tier-1 institutional bank and a five-year purchase agreement for rare earth valued at least $300 million. Serra Verde had already announced a 15-year offtake agreement with multiple U.S. government agencies and private companies, securing access to 100% of its Phase I production of magnetic rare earth and guaranteed pricing floors for dysprosium and terbium. By contrast, TMC The Metals Company, which extracts polymetallic nodules from the seabed, has seen its expected NOAA certification pushed out to October and no longer expects to have its permit by the first quarter of 2027, though it still aims to begin commercial vessel commissioning in next year's fourth quarter.

Impact on stocks 3

Defense & Geopolitical Fragmentation▲ · 1 stocks
USA Rare Earth, Inc.
USAR
▲ PositiveCapitalrelevance

Completed $2.8B Serra Verde acquisition with projected $550-650M EBITDA run rate and $1.8B adjusted EBITDA by 2030

Critical Materials & Supply Chain▼ · 1 stocks
TMC the metals company Inc
TMC
▼ NegativeRegulationrelevance

NOAA certification pushed to October and permit no longer expected by Q1 2027, delaying its seabed mining plans

Artificial Intelligence▲ · 1 stocks

Theme Impact 3

Off-coverage companies 1

Serra Verde GroupPrivate▲ Positive
Demandrelevance

Serra Verde's 15-year offtake agreement with U.S. government agencies and private companies secures 100% of Phase I magnetic rare earth production with guaranteed price floors

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