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Precision Castparts Corp. (NYSE: PCP), Portland, OR, has agreed to acquire Titanium Metals Corp. (NYSE: TIE), Dallas, TX, for $16.50 per share in cash. The transaction values Titanium Metals Corp. at a $2.9 billion.
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"Timet will provide us with the titanium capability that has always been a key missing piece of our overall product portfolio," said Mark Donegan, chairman and CEO of Precision Castparts.
"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,” he said.
PCC has secured $3 billion in bridge financing for the acquisition, which will ultimately be funded through a combination of cash on hand, commercial paper, bank debt and proceeds from the sale of notes and bonds.
The acquisition is expected to be completed by the end of 2012, after which Timet's results will be reported as part of PCC's Forged Products segment.
Timet offers a range of titanium products including ingot and slab, forging billet and mill forms. In 2011, more than 75 percent of Timet's sales were to aerospace and defense end markets, with Precision Castparts representing more than 15 percent of total sales.
Timet operates seven primary melting or mill facilities, in Henderson, NV; Toronto, OH; Morgantown, PA; Vallejo, CA; Witton, England; Waunarlwydd, Wales; and Ugine, France.