Arnold Magnetic Technologies Corporation, a subsidiary of Compass Diversified (NYSE: CODI), and USA Rare Earth Inc. (NASDAQ: USAR) announced a mutual sales and distribution agreement for rare earth permanent magnets.

Under the non-exclusive partnership, each company is authorized to sell and distribute the other's products while remaining independent contractors. Arnold will offer USAR's processed neodymium-iron-boron materials and finished magnets, while USAR will offer Arnold's finished permanent magnets produced from samarium-cobalt and neodymium-iron-boron materials.

Each party remains responsible for product quality, warranties, and product-related liabilities for goods it manufactures. Neither company will share in proceeds from the other's resale of products to end users.

The companies stated that rare earth magnets are components in electric vehicles, wind turbines, industrial equipment, and defense systems. Global supply chains for these materials remain concentrated outside the United States, according to the press release.

Arnold operates manufacturing facilities in the United States, United Kingdom, Switzerland, Thailand, and China, producing magnetic assemblies, permanent magnets, precision foil products, and composites. The Rochester, New York-based company has over 2,000 clients worldwide.

USA Rare Earth operates across the rare earth value chain through its ownership of Less Common Metals Ltd. and development of magnet manufacturing capacity in Stillwater, Oklahoma. The company processes materials from heavy rare earth processing to metal-making, alloy production, and neodymium magnet manufacturing.