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Kennametal Inc., Latrobe, PA, has signed a definitive agreement to sell its high speed steel drills, related product lines and assets to Chinese manufacturer Top Eastern Drill Co., Ltd. Top-Eastern Drills is a global manufacturer of high speed steel drills and taps.
The transaction includes four facilities and operations specifically related to the product lines located at Evans, Georgia; Clemson, South Carolina; Mexico City, Mexico; and Mississauga, Ontario. Kennametal presently has approximately 400 employees who are located at these facilities or otherwise involved with these product lines.
Kennametal expects to receive $29 million in proceeds from the divestiture and recognize a pre-tax loss on the sale and related pre-tax charges estimated to amount to a total of $30 million to $33 million, the majority of which will be recorded in the quarter ending June 30, 2009.
In addition to its core business, TDC owns and operates a molybdenum and a tungsten mine and processing facilities, a state of the art steel making plant, a tungsten carbide manufacturing plant, and is a manufacturer of coating equipment for the metal industry.