- MP Materials supplies materials essential to electric vehicles,
wind turbines, defense systems and many other advanced
technologies, produced at its world-class, “green” mine and
processing facility in Mountain Pass, CA
- MP Materials poised to become the Western champion of rare
earth magnetics, onshoring a critical sector that will power a
sustainable future
- Combined company to have an estimated post-transaction equity
value of approximately $1.5 billion with over $500 million in net
cash1 to fund growth strategy
- Transaction includes a $200 million fully committed common
stock PIPE at $10.00 per share anchored by Slate Path Capital,
Chamath Palihapitiya and Omega Family Office
- Current MP Materials shareholders, JHL Capital Group and QVT
Financial, will roll 100% of their existing equity holdings into
equity of the combined company
- Board of Directors to include former Chairman of the Joint
Chiefs of Staff General Richard Myers, former Omnicom Group CFO
Randy Weisenburger, and shareholder representatives
MP Materials, owner and operator of Mountain Pass, the only rare
earth mining and processing site of scale in North America, today
announced a definitive agreement to merge with Fortress Value
Acquisition Corp. (NYSE: FVAC), a special purpose acquisition
company sponsored by an affiliate of Fortress Investment Group LLC
("Fortress"). Upon completion of the transaction, the combined
company will be named MP Materials Corp. and will remain
NYSE-listed under the new ticker symbol "MP".
Following completion of the transaction, MP Materials will
retain its experienced management team. Co-Chairman James Litinsky
will become Chairman and CEO, current CEO Michael Rosenthal will
become COO, Ryan Corbett will continue to serve as CFO, and Sheila
Bangalore will continue to serve as Chief Strategy Officer and
General Counsel.
James Litinsky said, “This business combination and becoming a
public company is a key milestone in MP Materials’ mission to
restore the full rare earth supply chain to the United States of
America. Drew and the Fortress team share our vision that having a
Western champion in rare earth magnetics is essential for the
onshoring of jobs, national security, and a carbon-reduced future.
To achieve our mission, we must be economically competitive and
hold ourselves to the highest standards for the benefit of our
investors, employees, communities, country, and the
environment.”
Drew McKnight, CEO of FVAC, will serve as a member of the MP
Materials Board, along with Mr. Litinsky; General Richard Myers,
former Chairman of the Joint Chiefs of Staff; Randy Weisenburger,
former CFO of Omnicom Group; Dan Gold, CEO of QVT Financial LP, and
other directors with diverse and complementary backgrounds in areas
critical to MP Materials’ business.
Drew McKnight said, “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. The electrification
of global transportation and infrastructure will be a dominant
investment theme over the next several decades, leading to demand
for rare earths rapidly outpacing current levels of production and
supply. Mountain Pass is the only scaled North American source of
supply for these materials, and Jim and his team have already
restored Mountain Pass as a global leader in the rare earth market.
Together, we will leverage that foundation into a transformational
opportunity at a critical time for our nation.”
General Richard Myers said, “The United States was once the
global leader in rare earth production, a position that has since
been ceded to China. As global industries electrify in the coming
decades, the lack of a sustainable, reliable supply of rare earths
in North America would represent a single point of failure for
national and economic security. The U.S. government has identified
the urgent need to reclaim this crucial component of the global
supply chain, which would create tremendous benefits for our
nation’s leading defense contractors, automakers, and technology
companies. I am proud to serve on MP Materials’ Board as we lead
the way in making this important mandate a reality.”
World-Class Mine with Focus on Sustainability
MP Materials’ Mountain Pass site contains one of the richest
rare earth deposits in the world, with average ore grade of
approximately 8%, and includes state-of-the-art processing and
separation facilities.
Mountain Pass is also differentiated among rare earth producers
in sustainability. Operating using best-in-class environmental
practices, Mountain Pass utilizes a closed loop flotation process
that enables an estimated 95% reduction in water consumption
compared to similar operations, and the site has been recognized by
a leading international research center for its superiority in
managing environmental effects compared to other rare earth
processing facilities2.
Poised to Support the Electrification Boom Across
Industries
MP Materials currently produces a rare earth concentrate product
that represents an estimated 15% of the world’s production. As part
of the Company’s growth plan, it will produce refined
Neodymium-Praseodymium (“NdPr”). NdPr is the primary rare earth
material used in high-strength permanent magnets that power the
traction motors inside electric vehicles, wind turbines, robotics,
drones, defense systems, and many other high-growth, advanced
motion technologies. While China currently controls over 80% of the
global NdPr market, global industries and governments are actively
seeking to diversify beyond China to ensure material availability
and supply chain certainty to support the anticipated surge in
electric vehicle production and other forms of electrification. By
2035, annual consumption of NdPr by electric vehicles alone is
forecast to exceed the total expected production of NdPr in
20203.
Transaction Terms & Financing
The combined company will have an estimated post-transaction
equity value of approximately $1.5 billion with over $500 million
in net cash4. Cash proceeds raised will consist of FVAC’s $345
million of cash in trust and an additional $200 million investment,
led by institutional investors including Slate Path Capital,
Chamath Palihapitiya and Omega Family Office, at $10.00 per share
in the common stock of FVAC immediately prior to closing of the
merger.
MP Materials is expected to deliver over $100 million in
estimated revenue and nearly $30 million in estimated Adjusted
EBITDA in 2020. The net proceeds raised from the transaction will
be used to fund MP Materials’ strategic plan to retrofit and fully
recommission its existing on-site refining facilities and will
further enable the Company to pursue additional downstream growth
opportunities in the magnetics industry. MP Materials’ growth
strategy is expected to generate estimated Adjusted EBITDA of over
$250 million in 2023, subject to rare earth market conditions over
that period.
Current MP Materials shareholders, JHL Capital Group LLC and QVT
Financial LP, will roll 100% of their existing equity holdings into
equity of the combined company. The business combination has been
unanimously approved by the boards of directors of both MP
Materials and FVAC. Informational meetings with the investment
community are anticipated to be held in September 2020. The
business combination is expected to close in the fourth quarter of
2020, subject to regulatory and stockholder approvals, and other
customary closing conditions.
Advisors
Morgan Stanley & Co. LLC is serving as financial advisor and
Sidley Austin LLP is acting as legal advisor to MP Mine Operations
LLC (dba “MP Materials”). Simpson Thacher & Bartlett LLP and
Murray Devine are serving as legal and financial advisor,
respectively, to Secure Natural Resources (the owner of the mineral
rights at Mountain Pass), which is also a party to the merger and
will become a wholly-owned subsidiary of the combined company.
Deutsche Bank Securities and RBC Capital Markets, LLC are
serving as financial advisors, capital markets advisors, and
private placement agents to FVAC. Weil Gotshal & Manges, LLP is
acting as legal advisor to FVAC.
Investor Webcast Information
Management of MP Materials and FVAC will host an investor
webcast on July 15, 2020 at 9:00 a.m. EDT to discuss the proposed
transaction. The webcast will be accompanied by a detailed investor
presentation. For interested investors who wish to participate, the
webcast and replay will be available in the “Investors” section of
the MP Materials website at https://mpmaterials.com/.
Alternatively, a domestic toll-free access number is (833)
670-1030 and the international toll-free access number is (236)
738-2212. Once connected with the operator, request access to the
Fortress Value Acquisition Corp. and MP Materials business
combination call. Due to high call volumes, please dial in 15
minutes prior to the call start time.
An investor presentation with more detailed information
regarding the proposed transaction will be furnished to the
Securities and Exchange Commission (the “SEC”) by FVAC under the
cover of a Current Report on Form 8-K, which can be viewed through
the SEC’s EDGAR website at www.sec.gov. A link to Fortress Value
Acquisition Corp.’s SEC filings can be found at
https://www.fortressvalueac.com/sec-filings.
About MP Materials
MP Materials is the owner and operator of the Mountain Pass Rare
Earth Mining and Processing facility, the only integrated site of
its kind in the Western Hemisphere. With over 200 employees, MP
Materials produces approximately 15% of global rare earth
materials, essential for the development of technologies such as
defense systems, smartphones, drones, and electric vehicles. It
operates a green mining and processing facility and is currently
one of the lowest-cost producers of rare earth concentrate. MP
plays a leadership role in advocating for a more robust and
competitive rare earths industry in the U.S. More information is
available at https://mpmaterials.com/.
About Fortress Value Acquisition
Corp.
Fortress Value Acquisition Corp. is a special purpose
acquisition company formed for the purpose of effecting a merger,
capital stock exchange, asset acquisition, stock purchase,
reorganization or similar business combination with one or more
businesses.
Forward Looking Statements
Certain statements included in this press release that are not
historical facts are forward-looking statements for purposes of the
safe harbor provisions under the United States Private Securities
Litigation Reform Act of 1995. Forward-looking statements may be
identified by the use of the words such as " estimate," "plan,"
"project," "forecast," "intend," "expect," "anticipate," "believe,"
"seek," "target," or similar expressions that predict or indicate
future events or trends or that are not statements of historical
matters. These forward-looking statements include, but are not
limited to, statements regarding estimates and forecasts of other
financial and performance metrics and projections of market
opportunity. These statements are based on various assumptions,
whether or not identified in this press release, and on the current
expectations of MP Materials' and FVAC’s management and are not
predictions of actual performance. These forward-looking statements
are provided for illustrative purposes only and are not intended to
serve as, and must not be relied on by any investor as, a
guarantee, an assurance, a prediction or a definitive statement of
fact or probability. Actual events and circumstances are difficult
or impossible to predict and will differ from assumptions. Many
actual events and circumstances are beyond the control of MP
Materials and FVAC. These forward-looking statements are subject to
a number of risks and uncertainties, including changes in domestic
and foreign business, market, financial, political and legal
conditions; the inability of the parties to successfully or timely
consummate the transaction; the risk that any required regulatory
approvals are not obtained, are delayed or are subject to
unanticipated conditions that could adversely affect the combined
company or the expected benefits of the transaction; the risk that
the approval of the shareholders of MP Materials or stockholders of
FVAC is not obtained; the risk that any of the conditions to
closing are not satisfied in the anticipated manner or on the
anticipated timeline; failure to realize the anticipated benefits
of the transaction; risks relating to the uncertainty of the
projected financial information with respect to MP Materials; risks
related to the rollout of MP Materials’ business strategy and the
timing of expected business milestones; risks related to MP
Materials’ arrangements with Shenghe; the effects of competition on
MP Materials’ future business; risks related to political and
macroeconomic uncertainty; the amount of redemption requests made
by FVAC's public stockholders; the ability of FVAC or the combined
company to issue equity or equity-linked securities in connection
with the transaction or in the future; the impact of the global
COVID-19 pandemic on any of the foregoing risks; and those factors
discussed in FVAC's final prospectus filed on May 1, 2020 under the
heading "Risk Factors," and other documents of FVAC filed, or to be
filed, with the SEC. If any of these risks materialize or our
assumptions prove incorrect, actual results could differ materially
from the results implied by these forward-looking statements. There
may be additional risks that neither FVAC nor MP Materials
presently know or that FVAC and MP Materials currently believe are
immaterial that could also cause actual results to differ from
those contained in the forward-looking statements. In addition,
forward-looking statements reflect FVAC's and MP Materials’
expectations, plans or forecasts of future events and views as of
the date of this press release. FVAC and MP Materials anticipate
that subsequent events and developments will cause FVAC's and MP
Materials’ assessments to change. However, while FVAC and MP
Materials may elect to update these forward-looking statements at
some point in the future, FVAC and MP Materials specifically
disclaim any obligation to do so, unless required by applicable
law. These forward-looking statements should not be relied upon as
representing FVAC's and MP Materials’ assessments as of any date
subsequent to the date of this press release. Accordingly, undue
reliance should not be placed upon the forward-looking
statements.
Additional Information About the Proposed Business
Combination and Where To Find It
The proposed business combination will be submitted to
stockholders of FVAC for their consideration and approval at a
special meeting of stockholders. FVAC intends to file a
registration statement on Form S-4 (the “Registration Statement”)
with the SEC, which will include preliminary and definitive proxy
statements to be distributed to holders of FVAC’s common stock in
connection with FVAC’s solicitation for proxies for the vote by
FVAC’s stockholders in connection with the proposed business
combination and other matters as described in the Registration
Statement, as well as the prospectus relating to the offer of the
securities to be issued to MP Materials’ shareholders in connection
with the completion of the business combination. After the
Registration Statement has been filed and declared effective, FVAC
will mail a definitive proxy statement and other relevant documents
to its stockholders as of the record date established for voting on
the proposed business combination. FVAC's stockholders and other
interested persons are advised to read, once available, the
preliminary proxy statement and any amendments thereto and, once
available, the definitive proxy statement / prospectus, in
connection with FVAC's solicitation of proxies for its special
meeting of stockholders to be held to approve, among other things,
the proposed business combination, because these documents will
contain important information about FVAC, MP Materials and the
proposed business combination. Stockholders may also obtain a copy
of the preliminary or definitive proxy statement / prospectus, once
available, as well as other documents filed with the SEC regarding
the proposed business combination and other documents filed with
the SEC by FVAC, without charge, at the SEC's website located at
www.sec.gov or by directing a request to 1345 Avenue of the
Americas, 46th Floor, New York, New York 10105, Attention: R.
Edward Albert III, President (ealbert@fortress.com), CC: Alexander
Gillette (agillette@fortress.com).
This press release does not constitute an offer to sell or the
solicitation of an offer to buy any securities, or a solicitation
of any vote or approval, nor shall there be any sale of securities
in any jurisdiction in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the U.S. Securities Act of 1933, as
amended.
INVESTMENT IN ANY SECURITIES DESCRIBED HEREIN HAS NOT BEEN
APPROVED OR DISAPPROVED BY THE SEC OR ANY OTHER REGULATORY
AUTHORITY NOR HAS ANY AUTHORITY PASSED UPON OR ENDORSED THE MERITS
OF THE OFFERING OR THE ACCURACY OR ADEQUACY OF THE INFORMATION
CONTAINED HEREIN. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
Participants in the Solicitation
FVAC, MP Materials and certain of their respective directors,
executive officers and other members of management and employees
may, under SEC rules, be deemed to be participants in the
solicitations of proxies from FVAC’s stockholders in connection
with the proposed business combination. Information regarding the
persons who may, under SEC rules, be deemed participants in the
solicitation of FVAC’s stockholders in connection with the proposed
business combination will be set forth in FVAC’s proxy
statement/prospectus when it is filed with the SEC. You can find
more information about FVAC’s directors and executive officers in
FVAC’s final prospectus dated April 29, 2020 and filed with the SEC
on May 1, 2020. Additional information regarding the participants
in the proxy solicitation and a description of their direct and
indirect interests, by security holdings or otherwise, will be
included in FVAC’s preliminary and definitive proxy
statement/prospectus when it becomes available. Stockholders,
potential investors and other interested persons should read the
proxy statement/prospectus carefully when it becomes available
before making any voting or investment decisions. When available,
these documents can be obtained free of charge from the sources
indicated above.
Use of Projections; Non-GAAP Measures
This press release contains projected financial information with
respect to MP Materials, namely MP Materials’ projected Adjusted
EBITDA. Such projected financial information constitutes
forward-looking information, and is for illustrative purposes only
and should not be relied upon as necessarily being indicative of
future results. The assumptions and estimates underlying such
projected financial information are inherently uncertain and are
subject to a wide variety of significant business, economic,
competitive and other risks and uncertainties that could cause
actual results to differ materially from those contained in the
prospective financial information. See “Forward-Looking Statements”
above. Actual results may differ materially from the results
contemplated by the projected financial information contained in
this press release, and the inclusion of such information in this
press release should not be regarded as a representation by any
person that the results reflected in such projections will be
achieved. Neither the independent auditors of FVAC nor the
independent registered public accounting firm of MP Materials,
audited, reviewed, compiled, or performed any procedures with
respect to the projections for the purpose of their inclusion in
this presentation, and accordingly, neither of them expressed an
opinion or provided any other form of assurance with respect
thereto for purposes of this press release.
The Adjusted EBITDA projections used in this press release have
not been prepared in accordance with United States generally
accepted accounting principles (“GAAP”). EBITDA is defined as net
earnings (loss) before interest expense, income tax expense
(benefit), depreciation, amortization, accretion of asset
retirement obligations and environmental liabilities. Adjusted
EBITDA is defined as EBITDA plus a deferred revenue adjustment to
reflect the unrecognized portion of gross profit recoupments from
Offtake Advances, and excludes other non-recurring or special
items. MP Materials’ management uses Adjusted EBITDA and other
non-GAAP measures to compare MP Materials’ performance to that of
prior periods for trend analyses and for budgeting and planning
purposes. FVAC and MP Materials believe Adjusted EBITDA provides
useful information to management and investors regarding certain
financial and business trends relating to MP Materials’ financial
condition and results of operations. FVAC and MP Materials believe
that the use of Adjusted EBITDA provides an additional tool for
investors to use in evaluating projected operating results and
trends. MP Materials’ method of determining these non- GAAP
measures may be different from other companies' methods and,
therefore, may not be comparable to those used by other companies
and MP Materials does not recommend the sole use of these non-GAAP
measures to assess its financial performance. Management does not
consider non- GAAP measures in isolation or as an alternative to
financial measures determined in accordance with GAAP. The
principal limitation of non-GAAP financial measures is that they
exclude significant expenses and income that are required by GAAP
to be recorded in MP Materials’ financial statements. In addition,
they are subject to inherent limitations as they reflect the
exercise of judgments by management about which expense and income
are excluded or included in determining these non-GAAP financial
measures. In order to compensate for these limitations, management
presents non-GAAP financial measures in connection with GAAP
results. MP Materials is not providing a reconciliation of our
projected Adjusted EBITDA for full year 2020-2023 to the most
directly comparable measure prepared in accordance with GAAP,
because MP Materials is unable to provide this reconciliation
without unreasonable effort due to the uncertainty and inherent
difficulty of predicting the occurrence, the financial impact, and
the periods in which the adjustments may be recognized. For the
same reasons, MP Materials is unable to address the probable
significance of the unavailable information, which could be
material to future results. You should review MP Materials’ audited
financial statements, which will be included in the Registration
Statement filed with the SEC relating to the proposed
transaction.
1 Assumes no redemptions of FVAC public stockholders
2 According to independent research conducted by the Institute
of Energy and Climate Research (IEK) of the German government
research center Forschungszentrum Jülich.
3 Assumes 1 kg of NdPr consumption per EV unit and CRU current
NdPr global supply of 45.2kt
4 Assumes no redemptions of FVAC public stockholders
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200715005276/en/
For MP Materials: Investors: Ellipsis Jeff Majtyka
/ Alex Jorgensen IR@mpmaterials.com
Media: Sard Verbinnen & Co. George Sard / Jared Levy
/ David Millar MPM-SVC@sardverb.com Gasthalter & Co. Jonathan
Gasthalter / Carissa Felger MPM@Gasthalter.com 212-257-4170
For FVAC: Gordon E. Runté Managing Director Fortress
Investment Group LLC 212-798-6082
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