Allegheny to Sell Tungsten Biz to Kennametal

Specialty metals maker Allegheny Technologies Inc. ( ATI ) has entered into an agreement to sell its tungsten materials business to Latrobe, PA-based wear-resistant products company Kennametal Inc. ( KMT ) for $605 million.

Both companies' Board of Directors has approved the transaction. The deal is subject to necessary regulatory approvals and is expected to complete by the fourth quarter of 2013. Until the completion of the transaction, Allegheny will report the financial results of tungsten materials business under its discontinued operations.

Allegheny decided to divest its tungsten materials business so that it can focus more on its core businesses - High Performance Metals and Flat-Rolled Products.. The acquisition is also expected to increase Allegheny's financial flexibility and simplify its capital allocation and deployment.

Allegheny's tungsten materials business operates through roughly 1,175 employees across 14 operating facilities globally and consists of two market-leading divisions - ATI Firth Sterling and ATI Stellram. It produces tungsten powder, tungsten heavy alloys, tungsten carbide materials and carbide cutting tools. The business unit generated $338.6 million of total net revenues and $37.2 million of operating profit for the year ended Dec 31, 2012.

Kennametal will pay for the acquisition partly by cash and partly by available borrowings under its existing revolving credit facility.


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