Allegheny Technologies Inc. (ATI) has agreed to acquire fellow
metal-products maker Ladish Co. (LDSH) for about $778 million in
cash and stock.
Allegheny, a metal processor that makes products for the
aerospace and petrochemical industries, has seen revenue rise in
recent quarters, but has suffered from steel-price increases of
late. Ladish focuses on jet engine, aerospace and industrial
components. It has seen strong bottom-line improvement lately on
much stronger margins.
Ladish shareholders will get $24 and 0.4556 share of Allegheny
for each share they own. That values Ladish at $46.75 a share, a
59% premium to Tuesday's closing price. The stock had already
doubled this year, rebounding from a slump in recent years. The
stock was at the offer price as recently as three years ago.
Allegheny's product portfolio "combined with Ladish's
technologically advanced forging, investment casting, and machining
capabilities creates a more integrated, stable, and sustainable
supply chain for the aerospace, defense, and industrial markets,"
said Allegheny Chairman and Chief Executive L. Patrick Hassey.
Allegheny expects the deal to add to earnings after the first
year. It is expected to close early next year.
-By Matt Jarzemsky, Dow Jones Newswires; 212-416-2240;
matthew.jarzemsky@dowjones.com