Vacuumschmelze, one of the world’s leading producers of magnetic materials and products has announced it will build a major new magnet factory in South Carolina that will supply domestically produced magnets in the USA. The move comes shortly after the company, based in Hanau, Germany, was acquired by investment group Ara Partners in October.
VAC announced in December that e-VAC Magnetics, a part of the VAC group, will build its first facility in Sumter County in a project expected to represent more than half a billion-dollar investment and create 300 new jobs there. The company will construct, own and operate a new facility on 85 acres in the Pocotaligo Industrial Park in Sumter, housing production of permanent magnets for electric vehicles and defense applications.
e-VAC has entered into an agreement with the U.S. Department of Defense, which will provide $94.1 million to acquire and install manufacturing equipment, operationalize technical infrastructure, and engineer production lines for the facility. Establishment of the plant is also supported by a long-term contract which VAC made with General Motors in January 2023 to supply it with domestically produced rare-earth magnets for electric vehicle manufacturing. Operations at the plant are expected to be online in late autumn 2025.
In October, Ara Partners, a private equity firm that specializes in industrial decarbonization investments, acquired Vacuumschmelze. Terms of the transaction were not disclosed, however, funds for it were provided by Apollo, a large investment company based in New York City with more than $600 billion in assets under management. Ara operates from three locations in Houston, Boston and Dublin, Ireland. As of June 30, 2023, it had approximately $4.4 billion of assets under management.
“We are thrilled to acquire VAC, the premier Western producer of high-performance magnetic materials and a key enabler of electrification and energy efficiency across massive global industries,” commented Tuan Tran, a partner at Ara. “We believe the demand for VAC’s differentiated, customized products will continue to grow rapidly as companies around the world decarbonize their industrial processes and the electrification of mobility advances, and we look forward to leveraging our expertise to further enable VAC’s continued success.”
Erik Eschen, Chief Executive Officer of VAC, said, “We are excited to partner with Ara Partners, which has a strong track record of working closely with management teams across the industrial economy to create value while achieving meaningful decarbonization benefits. Ara and VAC will capitalize on significant growth opportunities for soft and hard magnetic solutions alongside our loyal partners and customers. In addition, we will accelerate work towards building our rare earths value chain, pursuing a range of strategic growth opportunities to establish a robust supply chain for EV manufacturing in the Western World.”
VAC has been in business for more than a hundred years. It also has manufacturing facilities in Slovakia, Finland, China and Malaysia with operations in more than 35 countries and more than 4,300 employees. With about EUR 400 million in annual revenues, it operates as a vertically integrated magnetic solutions provider that designs and manufactures soft and hard magnetic materials along with engineered magnetic products for a wide variety of industrial applications across the automotive, renewable energy, industrial automation, medical and aerospace sectors.
VAC was founded July 1, 1923 as Heraeus-Vacuumschmelze AG when W.C. Heraeus GmbH spun off its department for melting and processing non-precious metals as an independent company with 50 employees under the leadership of Dr. Wilhelm Rohn. Ten years earlier, Rohn had developed a process for melting metals in a vacuum. For more info, see www.vacuumschmelze.com and www.arapartners.com.