Yesterday, Precision Castparts Corp. (PCP) announced its decision to acquire Carlton Forge Works and related entities for $850 million. Carlton, with one facility in Paramount, CA, is a leading manufacturer of seamless rolled rings for critical aerospace applications. Carlton is a key supplier for Boeing 787 and Airbus XWB.
Precision Castparts will also acquire Arcturus Manufacturing Corporation, a hammer forging operation, as a part of this transaction. The acquisition, which is expected to be completed in the third quarter of fiscal 2010, will further strengthen PCP’s forging capabilities. The transaction is expected to be immediately accretive to the company’s earnings.
Precision Castparts derived 43.6% of its fiscal 2009 revenue from the Forged Products segment. The company is one of the leading manufacturers of forged components for the aerospace and power generation markets. The company has been expanding its Forged Products business through regular acquisitions. The previous acquisition was that of Hackney Ladish Holding Corp. a leading producer of forged pipe fittings for critical energy infrastructure and related applications, in fiscal 2009.
With the acquisition of Carlton, which the company has been targeting for several years, Precision Castparts fills the gap in its product portfolio. This acquisition enables the company to provide a full range of products to its engine customers.
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