Wednesday, Precision Castparts Corp. (PCP), said it agreed to acquire Carlton Forge Works and related entities in an $850 million deal that is expected to close during the third quarter of fiscal year 2010. Carlton is a manufacturer of seamless rolled rings for critical aerospace applications, and offers products such as nickel, titanium, and steel rolled rings. Founded in 1929,
As part of the transaction, Precision Castparts will also acquire Arcturus Manufacturing Corporation, a hammer forging operation in Oxnard, California. The acquisitions are expected to be completed during the third quarter of fiscal year 2010, after which their results will be reported as part of the Forged Products segment.
The cash acquisitions of Carlton and Arcturus, both of which will be treated as acquisitions of assets for tax purposes, will be immediately accretive to earnings.
Precision Castparts is a manufacturer of complex metal components and products. It serves the aerospace, power generation, and general industrial markets. PCC produces large, complex structural investment castings, airfoil castings, and forged components used in jet aircraft engines and industrial gas turbines. The company also produces highly engineered, critical fasteners for aerospace, and other general industrial markets and supplies metal alloys and other materials to the casting and forging industries.
Mark Donegan, chairman and chief executive officer of Precision Castparts Corp. Said,"Carlton is a critical strategic asset that we have aggressively pursued for several years. Ring rolling has been a distinct gap in product portfolio, and Carlton, the technology leader in that market, will enable PCC to provide a full range of products to customers. Carlton has also been very successful in building its market positions on all major programs currently in development, including the Boeing 787 and Airbus XWB."
The acquisition is also expected to significantly broaden the forging capabilities Precision Castparts, and expects to penetrate into the new markets, not tried earlier. Precision expects that the two companies together could reduce the material cost structure, and indicating that the acquisition would help strengthen the manufacturing operations in southern California.
PCP closed Wednesday's regular trading at $86.77 down $1.13 or 1.29% on a volume of 1.26 million shares on the NYSE and in the after hours trading the stock price increased 2.57% to $89.0.
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