Allegheny Technologies (NYSE: ATI), a specialty metals producer based in Pittsburgh, said today that it has agreed to buy Ladish (NASDAQ: LDSH) in a stock and cash deal worth $778 million.
Ladish, headquartered in Cudahy, Wisconsin, is a producer of metal components for the jet engine, aerospace and industrial markets.
Under the agreement, Allegheny will pay $24 in cash and 0.4556 of a share of its common stock for each Ladish share. Based on the volume weighted average price of Allegheny’s common stock over the last 10 trading days, the offer is roughly $48 per Ladish share, a 63% premium over Ladish’s closing share price yesterday.
The deal is subject to customary closing conditions, including approval by Ladish shareholders, and is expected to be completed in early 2011.
For 2010, Ladish expects sales of roughly $400 million, Allegheny said in a statement. Also, the deal is expected to produce at least $100 million of sales through market synergies.
The buyout is expected to be accretive to Allegheny’s earnings after the first year.
Since the announcement, Ladish’s share price has surged 55.6% to trade at $45.64 as of 11:03 am ET. Allegheny, on the other hand, dropped almost 2% to trade at $49.05.