Elmet to buy ams OSRAM's German metals arm, backed by $450M US defense investment

What's the deal? Elmet Group Co.Dealroom has a profile for this one. Try Dealroom → (NASDAQ: ELMT) has agreed to acquire ams OSRAMDealroom has a profile for this one. Try Dealroom →'s Schwabmünchen metal production operations in Germany, part of a broader push backed by a $450 million investment from the US Department of WarDealroom has a profile for this one. Try Dealroom →. The acquisition, with an undisclosed value, is expected to close in the first quarter of 2027.

What's the endgame? The deal gives Elmet an integrated tungsten and molybdenum manufacturing base in Europe, consolidated under its Critical Materials Components (CMC) division. No Department of War funding will go toward the acquisition.

Why now? The purchase lands alongside a $165 million-plus expansion of Elmet's CMC facilities in Lewiston, Maine; Coldwater, Michigan; and Euclid, Ohio. That build-out aims to raise tungsten powder production capacity fivefold and add capacity for defense programs including Patriot PAC and F-35 components.

What about the defense backing? The $450 million Department of War investment is structured as Class A redeemable preferred equity with a 5.5% paid-in-kind dividend and warrants for 19.9% of post-deal common stock. Funding releases in tranches: $200 million at close, then five $50 million tranches every six months. Separately, the Defense Logistics AgencyDealroom has a profile for this one. Try Dealroom → awarded Elmet a $2 billion contract to supply the National Defense Stockpile, with a $150 million funded commitment over five years.

By the numbers: For the 12 months ended July 3, 2026, Elmet reported revenue of $228.5 million and adjusted EBITDA of $31.8 million, a 13.9% margin. Total backlog rose 55% year-over-year to $131.5 million, with Aerospace, Defense & Government backlog doubling. The company projects 2031 revenue of $1.5–$1.7 billion.

What could go wrong? Elmet flags risks tied to construction execution, dependence on government appropriations, and dilution from warrants. Its forward-looking projections are non-GAAP and unaudited.

The signal: Governments are increasingly funding domestic supply of critical materials like tungsten, and Elmet's deal shows how that capital is now reshaping corporate M&A — stretching a US defense-backed supplier across the Atlantic into European production.

Read more: minichart.com.sg

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