Scores of companies have reached out to JPMorgan, the banker on the landmark deal between the Pentagon and MP Materials in which the U.S. government took a stake in the rare-earths producer.
The disclosure, from JPMorgan co-head of mid-cap M&A Andrew Castaldo, was made on a company-produced podcast.
The U.S. took a stake equivalent to as much as 15% of MP Materials through a $400 million convertible preferred security that also contains warrants that can be exercised by the government. The U.S. also provided a price-support agreement for MP Materials’ products.
JPMorgan also provided a commitment letter for $1 billion of financing for MP Materials to construct and develop a magnet manufacturing facility, and the Department of Defense was due to make a $150 million loan.
“So there’s a whole slew of critical minerals that we at JPMorgan and we believe the administration is also focused on, that could potentially be right for this type of collaboration. It not looking exactly the same way as MP Materials for sure, but certainly on the playing field,” said Castaldo.
Pharma or tech — AI, chips, quantum — are other fields where the government may want to invest.
“We’ve had no less than 100 calls with clients to talk about the MP transaction as well as what this means for other industries. And we’ve had numerous trips down to Washington to explore those opportunities with the government,” said Castaldo.
“So we’re very excited about what the next year will bring in terms of additional types of transactions and additional reshaping of industrial policy,” he added.
He said companies that want government support need to identify why that capital is needed and how quickly that capital would solve any problem.
JPMorgan has convened a task force of both commercial and investment bankers and government relations officials for potential deals.