A global metals manufacturer recently announced sale agreements of its divisions to two buyers: two non-core forging facilities to a middle-market private equity investment firm, and its Cast Products business to a manufacturing group.
Allegheny Technologies Incorporated (ATI) has agreed to sell the two non-core forging facilities to Wynnchurch Capital, LLC for $37 million in cash, and its Cast Products business to Consolidated Precision Products Corp. (CPP).
The forging facilities, located in Portland, Indiana, and Lebanon, Kentucky, are part of ATI’s High-Performance Materials & Components (HPMC) segment. They use primarily traditional forging methods to produce carbon steel forged products for use in the oil & gas, transportation, and construction & mining industries. They will be sold to Chicago, Illinois-based Wynnchurch Capital, LLC, a leading middle-market private equity investment firm. The transaction will close during the second quarter of 2019.
The ATI Cast Products business unit is part of the High-Performance Materials & Components (HPMC) segment. It produces titanium investment castings that are primarily used by aerospace & defense OEMs in the production of commercial jet airframes and engines. A post-casting machining facility in Salem, Oregon, will remain with ATI and provide services to CPP and others. CPP of Cleveland, Ohio, operates 16 global facilities manufacturing products primarily for the aerospace, defense, and industrial industries and is a portfolio company of Warburg Pincus, a leading global private equity firm. The transaction, subject to customary regulatory approvals, is expected to close in the early part of the third quarter of 2019.
“[The forging facilities] transaction is consistent with our ongoing efforts to actively evaluate our business portfolio to ensure we’re focused on key growth opportunities for HPMC in the aerospace & defense end-markets, specifically in nickel and titanium products as well as in advanced iso-thermal and hot-die forgings,” said John Sims, Executive Vice President, HPMC segment. “With the sale to Wynnchurch Capital, these solidly-performing, independent operations will become part of a company with a proven track record of investing in, growing and successfully operating industrial manufacturing businesses.”
“ATI’s HPMC segment is at its best when we couple our materials science expertise and extensive forging experience to produce critical jet engine components in our world-class production facilities,” added Sims. “ATI’s Cast Products business is a good fit for CPP’s aerospace and industrial focused business portfolio.”
“We continue to actively evaluate our business portfolio to ensure that we are focused on the businesses that offer ATI the best combination of growth, profitability, and corporate synergies,” said Robert S. Wetherbee, President and Chief Executive Officer of ATI.
