Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Kennametal to Acquire Allegheny's Tungsten Materials Business for $605 Million

In an effort to fast-track its growth strategy and diversify its aerospace, energy end market, and tooling portfolio, Kennametal (NYSE: KMT  ) has reached an agreement with Allegheny Technologies (NYSE: ATI  ) to acquire ATI's tungsten materials division for $605 million, Kennametal announced today.

The tungsten materials business generates approximately $340 million in annual sales, Kennametal said, and has about 1,175 employees located in 14 facilities around the world. The transaction accelerates Kennametal's plans for a tungsten carbide recycling plant in the U.S., and will reduce Kennametal's planned capital expenditures by $30 million to $35 million, the company said.

Kennametal will benefit from a significant step-up in tax basis, which will translate into a tax benefit equal to approximately $60 million to $70 million, according to the company. Synergies gained from the acquisition, according to Kennametal, will save as much as $30 million to $40 million in expenses annually. The company will utilize existing cash and draw on its credit facility to fund the deal.

The boards of directors of both Kennametal and ATI have unanimously agreed to the transaction. The deal is expected to close before the end of 2013, and is subject to customary closing conditions.

Allegheny said in its press release that the sale gives it better financial flexibility as Allegheny Technologies focuses on growth opportunities in its high-performance metals and flat-rolled products segments.

-- Material from The Associated Press was used in this report.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2639098, ~/Articles/ArticleHandler.aspx, 9/28/2016 10:42:02 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,238.62 10.32 0.06%
S&P 500 2,160.37 0.44 0.02%
NASD 5,305.99 0.27 0.01%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/28/2016 10:26 AM
ATI $17.84 Up +0.46 +2.65%
Allegheny Technolo… CAPS Rating: ***
KMT $28.20 Up +0.36 +1.29%
Kennametal CAPS Rating: *****