Over the last decade, revenue doubled for Electron Energy Corp., a specialty magnet manufacturer in East Hempfield Township, Lancaster County.
But if it wanted to keep growing, the company realized that it needed a partner, said Scott Murr, the company’s vice president of revenue operations.
That partner, announced yesterday, is Magnetic Holdings LLC, which has taken a majority stake in Electron Energy.
Terms of the transaction were not disclosed.
But in a press release yesterday, the companies said Electron Energy chairman and CEO Michael Walmer joined the board of Magnetic Holdings, while the Walmer family retained a “significant interest” in the company.
Magnetic Holdings is backed by Tinicum, a New York-based family office founded in 1974 by the late business leader Derald Ruttenberg. The office is now run by his son, Eric.
The seller: Electron Energy was founded in 1970 by Marlin Walmer, considered a pioneer in magnets containing rare earth elements.
Known as EEC, the company now employs about 150 people at two locations in the Lancaster area.
The firm’s specialty is samarium cobalt magnets, used in aerospace, defense, energy, medical, semiconductor and commercial space applications, Murr said.
Unlike electromagnets, which require an electrical charge to remain magnified, rare-earth magnets are considered permanent magnets.
The buyer: Magnetic Holdings is the parent of two other magnet companies: Illinois-based Dexter Magnetic Technologies and California-based Magnetic Component Engineering.
Dexter and Magnetic Component make magnetic components and assemblies for many of the same markets as EEC.
Why is this happening: EEC has “aggressive” growth plans and was looking for a partner to help reach them, Murr said, declining to share the company’s revenue.
The company explored partnerships with other firms, but it was attracted to the values it found at Tinicum, which follows a philosophy of long-term ownership.
“Both Tinicum and EEC are led by their founding families, ensuring a continuation of vision for the future and legacy for the long term,” Michael Walmer said in a statement.
In particular, EEC execs appreciated that Tinicum preserved the brands and cultures of its two previous additions to Magnetic Holdings, Murr said. “We liked what we saw there, and we saw that it was going to be a good fit for us.”
EEC will continue operating under its own name and with its existing leaders.
The trend: The magnet industry was born in the U.S. but moved to China in the 1990s and 2000s in search of lower costs.
Oner the last few years, there has been a push to bring production back to the U.S., given the needs of the defense industry.
Rare earth magnets are used in drones, nuclear submarines, missile systems and fighter jets, among other things, according to the U.S. Department of Defense, which has awarded contracts of more than $439 million since 2020 to establish a domestic supply chain.
EEC is one of a handful of U.S.-based manufacturers.
“That makes us a very attractive supplier,” Murr said.
