Allegheny Technologies Inc. (ATI) has agreed to sell its
tungsten materials business to Kennametal Inc. for $605
million, the companies said Sept. 16. The deal is expected to
close by year-end.
said the sale of ATI Tungsten Materials, part of its Engineered
Materials segment, "strengthens (the companys) focus on
ATIs core strategic businesses," namely its High
Performance Metals and Flat-Rolled Products segments.
opportunities are in our High Performance Metals segment
businesses, including precision forgings and titanium
investment castings, and in our diversified Flat-Rolled
Products businesses," ATI chairman, president and chief
executive officer Richard J. Harshman said in a statement,
adding that the sale would provide ATI with "increased
financial flexibility" and "simplifies capital allocation and
Materials, which employees 1,175 people across 14 facilities
worldwide, generated $338.6 million in revenue and an operating
profit of $37.2 million in 2012. The division produces tungsten
powders, tungsten heavy alloys, tungsten carbide materials and
carbide cutting tools.
While the tungsten
market "was a very good business" for ATI, the sale was
motivated by the companys desire to focus on growing
industries served by its High Performance Metals and
Flat-Rolled Products segments, vice president of investor
relations and corporate communications Dan Greenfield told
"The largest end
market for the High Performance Metals segment is aerospace,
and backlogs in aerospace are at record levels," he said.
"Weve spent an unprecedented level of capital on
developing our capabilities in that segment."
Greenfield also cited
ATIs investment in a $1.2-billion hot-rolling and
processing facility currently under construction in
Brackenridge, Pa., as evidence of its focus on flat-rolled
amm.com, Jan. 24).
Kennametal, a Latrobe,
Pa.-based supplier of industrial tools and materials, said the
deal will diversify its tungsten sourcing, including access to
raw materials and recycled products. The acquisition will also
accelerate "plans to expand capacity and develop an advanced
tungsten carbide recycling facility in the U.S.," according to