Carpenter (CRS) Completes Latrobe Specialty Acquisition; Will Transfer Some Alloy Assets
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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.
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.
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