Allegheny Technologies has agreed to sell two non-core forging facilities for $37 million in cash, according to a release from the company. The facilities, which are located in Portland, Indiana and Lebanon, Kentucky, are part of ATI’s High Performance Materials and Components (HPMC) segment. They use traditional forging methods to produce carbon steel forged products for use in oil and gas, transportation, construction and mining industries. Sales
from the two facilities totaled $86 million in 2018. The purchaser of the two plants is the Chicago-based Wynnchurch Capital LLC, a middle-market private equity investment firm that invests in middle-market companies in the United States and Canada. The deal is expected to close in the second quarter of 2019. According to the company’s press release, the $37 million netted from the sale will be used to further Allegheny Technologies’ capital deployment priorities, particularly the reduction of corporate debt levels and the funding of pension obligations. With $10 million of goodwill allocated to these operations from ATI’s Forged Products reporting unit, the company’s second quarter results will include an approximate $7 million loss on this transaction.
“This transaction is consistent with our ongoing efforts to actively evaluate our business portfolio to ensure we’re focused on key growth opportunities for HPMC in the aerospace & defense end-markets, specifically in nickel and titanium products as well as in advanced iso-thermal and hot-die forgings,” John Sims, executive vice president of the HPMC segment, said in a statement.