Kennametal to buy ATI's Tungsten Materials
Kennametal 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.
"ATI's Tungsten Materials Business brings vital strategic assets that are an excellent complement to Kennametal, especially given our common focus on operational excellence and industry-leading material science," said Kennametal chairman, president and CEO Carlos Cardoso. "The addition of the expanded material and tooling technologies of ATI's Tungsten Materials Business will enable us to offer more to our customers around the world. We look forward to building on our respective strengths to accelerate growth while generating even greater value for our business and ultimately our shareholders."
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 acquisition is expected to generate significant synergies. 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. Kennametal also plans to pursue revenue synergies by extending the sales of ATI's Tungsten Materials Business globally through its existing sales channels, while building further on its strategic talent and technologies.
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