Precision Castparts has entered into a definitive agreement to acquire Titanium Metals Corporation for $16.50 per share in cash. The transaction values Titanium Metals Corporation (Timet) at a total enterprise value of approximately $2.9 billion, including net cash and equivalents.
“Timet will provide us with the titanium capability that has always been a key missing piece of our overall product portfolio,” said chairman and chief executive officer of Precision Castparts Corp (PCC), Mark Donegan. “As our 2006 acquisition of Special Metals did for us with nickel alloys, acquiring Timet will enable us to streamline our supply chain and better manage our input costs in our core operations. As we continue to grow in the aerostructure market, this supply linkage will present even more of an opportunity.”
“The potential for value creation is vast – we expect to generate significant synergies by putting our two companies together and leveraging our respective strengths,” Donegan added. “Timet’s melting expertise and PCC’s forging and conversion assets are a complementary strategic fit. We will attack our collective cost structure and leverage our combined conversion assets to further enhance our respective customer presences and to penetrate new markets.”
“This transaction is truly a needle mover, a deal that offers PCC and our customers a wide range of opportunities going forward,” Donegan concluded. We’ve worked with Timet for many years and are quite familiar with their operations, so we expect integration to move ahead quickly once the merger is completed.”
