Precision Castparts Corporation (PCC) has signed a definitive agreement to acquire SPS Technologies, Inc, a supplier of fasteners and other metal products, in a transaction valued at approximately $43.78 per SPS Technologies share. The total equity consideration including after-tax option payments is $575 million.
‘This acquisition will strengthen Precision Castparts Corp.’s (PCC) core business as a leading supplier of complex metal products for aerospace customers and provide significant cost-saving synergies, right away and well into the future,’ said Mark Donegan, PCC’s chairman and chief executive officer.
‘SPS, like PCC, operates manufacturing businesses that are well suited to PCC’s core competencies: enhancing efficiency and reducing costs in the manufacturing of complex metal components.
‘In addition, the acquisition will further diversify our business by enhancing exposure to new markets including automotive applications, which represented approximately one-quarter of SPS’s 2002 sales,’ added Donegan.
PCC expects to achieve annual savings of approximately $20 to $25 million in the first 12 to 15 months following the closure of the acquisition, with cost savings forecast to reach $30 to $35 million annually.
The acquisition, which has been approved by the boards of directors of both companies, is expected to close during the fourth quarter of calendar 2003, subject to various approvals, including the approval of regulatory authorities and 80% of SPS’s shareholders.