Kennametal Inc. has announced an agreement to acquire the Tungsten Materials Business of Allegheny Technologies Incorporated (ATI) for $605 million. ATI’s Tungsten Materials Business, with around $340 million in annual sales, produces tungsten powder, tungsten heavy alloys, tungsten carbide materials and carbide cutting tools. The business has approximately 1175 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 2013, subject to customary regulatory approvals and closing conditions.
“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,” stated Kennametal Chairman, President and CEO Carlos Cardoso.
According to Kennametal, this acquisition is aligned with the company’s growth strategy and positions the group to further diversify its portfolio. The company expects to capitalise on the material technology capabilities, engineered components and tooling products of ATI’s Tungsten Materials Business to expand its presence in the aerospace and energy markets.
The ability of ATI’s Tungsten Materials Business to produce critical materials from recovered tooling and scrap will enhance Kennametal’s material sourcing and accelerate previously announced plans to expand capacity and develop an advanced tungsten carbide recycling facility in the US.
In addition, the acquisition will expand 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.