Pittsburgh company to acquire Ladish Co.
Cudahy-based Ladish Co. will be acquired by Allegheny Technologies Inc. of Pittsburgh, Pa. for an aggregate fully distributed equity value of approximately $778 million.
ATI does not plan layoffs at any of Ladish’s operations, nor does it plan to move the company’s headquarters and main manufacturing facility in Cudahy, said L. Patrick Hassey, chairman and chief executive officer of ATI.
“We do things they do not, and they do things we do not,” he said. “This is a plug and play (acquisition).”
The Ladish name will be retained in some form, said Gary Vroman, president and CEO of Ladish.
“We’ve been here for 105 years, and the Ladish name will be part of this company in the future,”Vroman told BizTimes today.
Ladish’s top management will be retained, Vroman said, as will the company’s 1,700 workers. Ladish has about 800 employees in Cudahy.
“There will be no impact on our head count,” he said. “And the more we talk (about the acquisition), the more excited we get about the growth potenitial.”
ATI believes that the combined companies will grow their sales by $100 million per year, largely by offering new services and capabilities to each others’ customers.
Ladish’s forging and design capabilities, technological base and problem-solving capabilities made it an ideal acquisition for ATI, Hassey said. The Cudahy facility features forging and metal forming equipment that can produce parts few others in the world can make.
“This is a complimentary combination that strengthens the offerings of both companies,” Hassey said. “(Ladish) has a lot of unique things that a lot of other people don’t have. They have broad capabilities for producing parts, and a lot of unique things that can bring unique opportunities to the market.”
Ladish shareholders will receive $24.00 in cash and 0.4556 of a share of ATI common stock for each share of Ladish common stock. Based on the volume weighted average price of ATI common stock over the last 10 trading days ending November 16, 2010, the aggregate consideration on a fully diluted basis is $48.00 per Ladish share. The transaction is subject to normal closing conditions, including approval by Ladish shareholders, and is expected to be completed in early 2011.
"ATI’s unique industry-leading product portfolio combined with Ladish’s technologically advanced forging, investment casting, and machining capabilities creates a more integrated, stable, and sustainable supply chain for the aerospace, defense, and industrial markets," Hassey said. "We like the people, the technology, and the market position of Ladish. Our strategy is to build unsurpassed manufacturing capabilities and develop innovative new products that add value for our customers. With this strategic acquisition, we leverage these capabilities to forward integrate and better position ATI to capitalize on secular growth trends in our key markets.
Ladish expects sales of approximately $400 million in 2010 and anticipates that sales will continue to grow with the aerospace market recovery.
“In addition, we believe at least $100 million of sales can be added through market synergies. We expect this acquisition to generate positive cash flow to ATI immediately after the transaction closes. We expect the acquisition to be accretive to earnings after the first year,” Hassey said.
Vroman said, "We have been preparing and positioning our company for market growth. Highly skilled people are trained and in place, and our equipment is ready to go. Integrating Ladish’s manufacturing operations with ATI’s broad product range of specialty metals immediately enhances our ability to serve our existing customer base. Beyond that, there are new markets now well within our reach that were previously a stretch for us. Without question, this merger significantly improves the long-term outlook for Ladish. We are looking forward to what the future will bring for our 1,700 dedicated employees in the United States and Poland."
