Carpenter Technology (NYSE:CRS) is acquiring high-performance materials maker Latrobe for $558 million in cash and stock in an effort to add needed capacity to help meet customer demand.
Under the terms of the deal, Carpenter, which makes conventional and powder metal specialty alloys, will provide 8.1 million of its shares valued at $388 million to Latrobe's owners Hicks Equity and The Watermill Group.
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Latrobe, which was acquired by Hicks and Watermill in 2006, distributes materials for the aerospace, defense and energy segments through seven centers in the U.S. The company last year had sales of $379 million.
The Latrobe buy provides needed capacity to meet strong customer demand for our premium products, improves our position in attractive segments like aerospace and energy, provides capabilities that will help us commercialize important new product offerings, and offers us improved returns on new capability investments, Carpenter CEO William Wulfsohn said in a statement.
The company expects to see $25 million in annual synergies upon the deals close, which is slated for September of this year pending customary closing conditions and regulatory approvals. At that time, Latrobes shareholders will own about 15.5% of Carpenters outstanding stock.
Hicks CEO Thomas Hicks and Watermill founder Steven Karol will join Carpenters board.