Smartkem has entered into a definitive agreement to merge with Ferrox Critical Minerals in an all-stock transaction valuing Ferrox at $125 million. The combination would expand Smartkem’s materials platform beyond electronic materials and into critical minerals, creating a more vertically integrated public electronics and materials company.
Ferrox shareholders will receive newly issued Smartkem common shares with an aggregate value of $125 million, reduced by Ferrox’s debt obligations to Smartkem under outstanding promissory notes.
No cash consideration will be paid. The number of Smartkem shares issued will be determined using the stock’s volume-weighted average price over the 30 trading days immediately preceding the closing.
Ferrox’s principal asset is the Tivani project in Limpopo Province, South Africa. The project holds mining rights covering iron, titanium and vanadium, materials used across steel, pigments, aerospace and energy storage supply chains.
Ferrox owns a 74% beneficial interest in the Tivani project through its South African subsidiary structure. Red River Exploration and Mining, the project’s Broad-Based Black Economic Empowerment partner, holds the remaining 26% interest.
Smartkem develops custom electronic materials through its TRUFLEX platform, which is designed to integrate with existing manufacturing processes across a range of electronic applications.
The companies expect the merger to provide Smartkem with access to critical mineral supplies for its own materials operations while creating an opportunity to sell excess production into global markets.
Terrence Duffy, currently Chairman and CEO of Ferrox, is expected to become Smartkem’s incoming CEO.
The transaction has been approved by the boards of both companies. Closing remains subject to shareholder approvals, effectiveness of a Form S-4 registration statement, Nasdaq approval, governmental clearances and other customary conditions.
Either company may terminate the agreement if the transaction has not been completed by March 31, 2027.
KEY QUOTES:
“Smartkem is the leader in materials science, formulating and engineering materials for demanding industrial applications. This combination carries that work into critical minerals.”
Ian Jenks, CEO and Chairman of Smartkem
“To be taking it forward alongside Ian and a company built on materials science is the right home for this project.”
“Our ambition is to build a long-life, multi-critical-mineral business over the years ahead.”
Terrence Duffy, Chairman and CEO of Ferrox Critical Minerals
