WYOMISSING, Pa.--(BUSINESS WIRE)--Feb. 29, 2012--
Carpenter Technology Corporation (NYSE: CRS) today announced that they
have completed the acquisition of Latrobe Specialty Metals, Inc.
following approval by the U.S. Federal Trade Commission (FTC).
In June 2011, the companies announced a definitive merger agreement
whereby Carpenter would acquire Latrobe in a transaction valued at
approximately $558 million based on Carpenter’s share price at the time
of announcement. Former owners of Latrobe, including Hicks Equity
Partners and The Watermill Group, received 8.1 million shares of
Carpenter stock as a part of the transaction. Pursuant to the terms of
the merger agreement, Carpenter also paid approximately $168 million in
cash at closing to pay off Latrobe debt and reimburse certain
transaction costs.
As part of the FTC approval, Carpenter entered into a consent decree to
transfer assets and technical knowledge to Eramet S.A. and its
subsidiaries, Aubert & Duval and Brown Europe, which will allow them to
become a second manufacturer of two specific alloys in order to provide
customers with a supply alternative in the marketplace. The alloys (MP35N®
and MP159®) have minimal sales impact, and will cause
no material change to the economics of the transaction. Carpenter has
agreed to transfer or acquire assets worth approximately $5 million as
part of the agreement with Eramet, and will record a charge for this
liability in the current quarter.
Concurrent with the closing of the transaction, Carpenter’s Board of
Directors has elected Thomas O. Hicks, Chairman and Chief Executive
Officer of Hicks Equity Partners and Steven E. Karol, Managing Partner
and Founder of The Watermill Group to the Board, consistent with the
terms of the merger agreement.
“We’re excited to begin the next chapter in the history of these two
great companies,” said William A. Wulfsohn, Carpenter’s President & CEO.
“We will immediately begin to integrate the businesses and focus on
leveraging the combined capabilities to increase production capacity and
optimize total system costs. A key benefit of this transaction – in
combination with our new premium products focus facility in Alabama –
will be to substantially increase production to meet strong customer
demand for premium products. We still expect the transaction will be
accretive to shareholders in the first full year and strongly accretive
thereafter.”
“I am excited to join the Carpenter Board and support the Company in
realizing its strategy to be the leading provider of specialty materials
globally,” said Steven E. Karol. “The Latrobe competencies paired with
Carpenter’s current and future capabilities are an extraordinary
combination.”
“I am pleased by the focus and collaboration our teams demonstrated in
completing this transaction,” said Thomas O. Hicks. “The combined
companies have strong growth prospects in their business markets and I
look forward to supporting the businesses as a major shareholder and
member of Carpenter's Board.”
Andy Ziolkowski has been selected to lead operations at Latrobe as
Senior Vice President – Latrobe Operations. Ziolkowski has been with
Carpenter Technology for more than two decades and recently held the
position of Vice President – Bar and Coil Business, and Senior Vice
President – Strategic Integration to lead the integration planning
efforts. He holds an MBA from St. Joseph’s University, Philadelphia and
an undergraduate degree from Indiana University of Pennsylvania.
Chris DiSantis, Latrobe’s President & CEO since January 2011, will
continue in a consulting role for Carpenter.
*MP35N and MP159 are Registered Trademarks of SPS Technologies, LLC
Forward-Looking Statements
Except for historical information, all other information in this news
release consists of forward-looking statements within the meaning of the
Private Securities Litigation Act of 1995. These forward-looking
statements are subject to risks and uncertainties that could cause
actual results to differ from those projected, anticipated or implied.
The most significant of these uncertainties are described in Carpenter's
filings with the Securities and Exchange Commission including its annual
report on Form 10-K for the year ended June 30, 2011 and the quarterly
reports on Form 10-Q for the quarters ended September 30, 2011, December
31, 2011 and the exhibits attached to those filings. They include but
are not limited to: (1) the parties’ expectations with respect to the
synergies, costs and other anticipated financial impacts of the
transaction could differ from actual synergies realized, costs incurred
and financial impacts experienced as a result of the transaction; (2)
the impact of the consent decree and the transfer of assets and
technical knowledge to Eramet S.A. and its subsidiaries, (3) the
ability to merge the Carpenter and Latrobe businesses and to leverage
the combined capabilities to increase production capability and optimize
total system costs; (4) the cyclical nature of the specialty materials
business and certain end-use markets, including aerospace, industrial,
automotive, consumer, medical, and energy, or other influences on
Carpenter's business such as new competitors, the consolidation of
competitors, customers, and suppliers or the transfer of manufacturing
capacity from the United States to foreign countries;(5) the ability of
Carpenter to achieve cost savings, productivity improvements or process
changes; (6) the ability to recoup increases in the cost of energy, raw
materials, freight or other factors; (7) domestic and foreign excess
manufacturing capacity for certain metals; (8) fluctuations in currency
exchange rates; (9) the degree of success of government trade actions;
(10) the valuation of the assets and liabilities in Carpenter's pension
trusts and the accounting for pension plans; (11) possible labor
disputes or work stoppages; (12) the potential that our customers may
substitute alternate materials or adopt different manufacturing
practices that replace or limit the suitability of our products; (13)
the ability to successfully acquire and integrate acquisitions;(14) the
availability of credit facilities to Carpenter, its customers or other
members of the supply chain; (15) the ability to obtain energy or raw
materials, especially from suppliers located in countries that may be
subject to unstable political or economic conditions; (16) our
manufacturing processes are dependent upon highly specialized equipment
located primarily in one facility in Reading, Pennsylvania for which
there may be limited alternatives if there are significant equipment
failures or catastrophic event; and (17) our future success depends on
the continued service and availability of key personnel, including
members of our executive management team, management, metallurgists and
other skilled personnel and the loss of these key personnel could affect
our ability to perform until suitable replacements are found. Any of
these factors could have an adverse and/or fluctuating effect on
Carpenter's results of operations. The forward-looking statements in
this document are intended to be subject to the safe harbor protection
provided by Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.
Carpenter undertakes no obligation to update or revise any
forward-looking statements.
Source: Carpenter Technology Corporation
Carpenter Technology Corporation
Media Inquiries:
William J.
Rudolph, Jr., 610-208-3892
wrudolph@cartech.com
or
Investor
Inquiries:
Michael A. Hajost, 610-208-3476
mhajost@cartech.com