ATI¡¯s Tungsten Carbide Materials Business
Kennametal Inc. has signed a definitive agreement to acquire the Tungsten Materials Business of Allegheny Technologies Incorporated for $605 million. ATI¡¯s Tungsten Materials Business, with approximately $340 million in annual sales, is a producer of tungsten metallurgical powders, as well as tooling technologies and components. The business has approximately 1,175 employees across 14 operating facilities globally and consists of two divisions: ATI Firth Sterling and ATI Stellram. The transaction has been approved by both companies¡¯ boards of directors and is expected to close before the end of the calendar year, subject to customary regulatory approvals and closing conditions.
The acquisition accelerates Kennametal¡¯s plans to expand capacity and develop an advanced tungsten carbide recycling facility in the U.S. The company also estimates that this will reduce planned capital expenditures by approximately $30 million to $35 million and expects to achieve economy of scale 6 to 8 years earlier than prior projections.
In addition, the acquisition will further augment Kennametal¡¯s tooling portfolio in the areas of metal cutting and metal finishing technologies, through brands such as Stellram Products, Garryson Products and Landis Products.
The company forecasts potential annual run-rate cost synergies ranging from $30 million to $40 million, which it anticipates will be realized via productivity improvements, operational efficiencies and raw-material cost benefits.
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