Kennametal to Acquire ATI’s Tungsten Materials Business

Kennametal Inc., a specialty metals manufacturing firm headquartered in Latrobe, Pa., has signed a definitive agreement to acquire the Allegheny Technology Inc.’s (ATI) Tungsten Materials Business for $605 million. ATI’s Tungsten Materials Business 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 is based in Pittsburgh.

“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,” says Carolos Cardoso, Kennametal’s chairman, president and CEO. “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.”

This acquisition is aligned with Kennametal’s growth strategy and positions the company to further diversify its portfolio. The company expects to capitalize on the material technology capabilities, engineered components and world-class tooling products of ATI’s Tungsten Materials Business to expand its presence in the aerospace and energy markets. 

According to a Kennametal press release, the acquisition will advance the company’s core strategy of diversifying the company’s tungsten sourcing to balance supplies, costs and access to raw materials, including those produced from recycled products. The ability of ATI’s Tungsten Materials Business to produce critical materials from recovered tooling and scrap will enhance Kennametal's material sourcing and development capabilities to support its growth initiatives.

The company also notes that the acquisition will accelerate its previously announced plans to expand capacity and develop an advanced tungsten carbide recycling facility in the United States to serve global markets. The company also estimates that this will reduce planned capital expenditures by $30 million to 35 million and expects to achieve economy of scale six to eight years earlier than prior projections.

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