Arnold Magnetic Technologies Corporation, a unit of Compass Diversified (NYSE:CODI), has entered into a mutual sales and distribution agreement with USA Rare Earth Inc. (NASDAQ:USAR) covering rare earth permanent magnets.
Under the non-exclusive arrangement, both companies will be able to market and distribute each other’s products while continuing to operate as independent contractors. Arnold will distribute USAR’s processed neodymium-iron-boron materials as well as finished magnets, while USAR will offer Arnold’s finished permanent magnets made from samarium-cobalt and neodymium-iron-boron materials.
Each company will remain responsible for the quality of the products it manufactures, including warranties and any related liabilities. The agreement also specifies that neither party will participate in the revenue generated when the other resells products to final customers.
Rare earth magnets are widely used in technologies such as electric vehicles, wind turbines, industrial machinery and defense systems. According to the companies, global supply chains for these materials remain heavily concentrated outside the United States.
Arnold operates manufacturing facilities in several countries, including the United States, the United Kingdom, Switzerland, Thailand and China. The Rochester, New York-based manufacturer produces magnetic assemblies, permanent magnets, precision foil products and composite materials, and serves more than 2,000 customers worldwide.
USA Rare Earth is active across multiple stages of the rare earth supply chain through its ownership of Less Common Metals Ltd. and its efforts to build magnet manufacturing capacity in Stillwater, Oklahoma. The company’s operations span heavy rare earth processing, metal production, alloy manufacturing and neodymium magnet production.