Kennametal Inc., Latrobe, PA, has signed a definitive agreement with KPAC LLC to divest Kennametal's Kemmer Praezision Electronics business. Kemmer Praezision manufactures and markets tungsten carbide consumable tools for the printed circuit board market. The disposition of this business is in line with Kennametal's recently announced intention to accelerate its manufacturing rationalization opportunities and its strategy to focus on core businesses.
The transaction, which is expected to be complete by September 2006, (first quarter fiscal year 2007 for Kennametal), remains subject to certain negotiated conditions of closing. The estimated loss from this divestiture is expected to be $0.45 to $0.50 per share and is related to the estimated $0.55 to $0.70 per share manufacturing rationalization charge previously announced on March 16, 2006.
KPAC LLC, a private investment company, will acquire the North American, European, and Asia-Pacific assets and operations of the business.
"With this transaction we are able to move quickly on our plan to streamline manufacturing operations and to continue our focus on core businesses," said Jim Breisinger, Kennametal Vice President and President of the company's Advanced Components Group. "We are redeploying Kennametal resources on our growing advanced materials and engineered components businesses by exiting targeted sectors. Kemmer Praezision is an industry leader with strong market position, a highly regarded brand name, and excellent workforce."