Carpenter Technology Corporation has entered into a definitive merger agreement with Latrobe Specialty Metals Inc. "The combination creates a business not just with better economics, but with more durable competitive advantage leveraging the expertise of both companies," said Latrobe president and CEO B. Christopher DiSantis.
Carpenter will acquire Latrobe for $558 million, which included 8.1 million shares of Carpenter stock valued at $338 million issued to Latrobe's current owners. An additional $170 million in cash will also be paid to Latrobe to eliminate debt at closing and to reimburse transaction costs. The deal is expected to close by the end of this September.
The two companies produce forgings and similar products serving the automotive, aerospace, and energy industries. Carpenter boasts three such production facilities in Orangeburg, SC; Bridgeville, PA; and Washington, PA. Latrobe's five production facilities include the main plant at its namesake Latrobe, PA; Franklin, PA; Wauseon, OH; Houston, TX; and Mobile, AL.
"Our strategy is to grow through a combination of organic growth initiatives and acquisitions, with a focus on markets that value the technical sophistication of our products," said Carpenter Technology president and CEO William Wulfsohn. "The Latrobe acquisition will provide needed capacity to meet strong customer demand for our premium products, improves our position in attractive segments likes aerospace and energy, provides capabilities that will help us commercialize important new product offerings, and offers us improved returns one capability investments."