Carpenter Technology Announces Acquisition of Amega West Services, LLC – Expands Reach in the Oil & Gas Market
January 03 2011 - 9:15AM
Business Wire
Carpenter Technology Corporation (NYSE:CRS) today announced it
has acquired Amega West Services, LLC, a Houston-based manufacturer
and service provider of complex components for directional drilling
equipment. The business was purchased from a group consisting of
Energy Special Situations Funds, other investors and certain Amega
West employees for approximately $54 million. The acquisition
provides Carpenter with additional opportunities for selling
specialty alloys into the growing oil & gas market. The
transaction is expected to be modestly accretive to earnings in
fiscal year 2011.
“We view energy as one of our fastest growing end-markets and we
are expanding our portfolio of target applications in oil & gas
and power generation,” said William A. Wulfsohn, President and
Chief Executive Officer of Carpenter Technology. “In particular, we
believe that global oil & gas demand will continue to rise and
directional drilling activity, which uses a variety of our
specialty alloys, will increase. This acquisition enables us to
accelerate our participation in the growth of directional drilling
and speeds up introduction of new alloys into the market.”
Amega West is a leading manufacturer of high-precision
components for measurement while drilling (MWD) and logging while
drilling (LWD), drill collars, stabilizers and other down-hole
tools used for directional drilling, which reduces the cost and
environmental impact of oil & gas production. It is well known
in the directional drilling industry for its high-precision
machining, well-positioned rental fleet, and responsive customer
service. Its management team has, in a short period of time,
developed a reputation for high-quality products and outstanding
service.
Carpenter Technology currently supplies alloys to Amega West.
Carpenter’s industry-leading product portfolio of specialty alloys
combined with Amega West’s capabilities in manufacturing components
and tools used in directional drilling creates a more integrated,
value-added supply chain for customers in the oil & gas market.
Carpenter plans to expand Amega West’s manufacturing capacity at
its Tyler, Texas, facility, as well as the rental fleet and the
footprint of the company’s five North American service centers.
Amega West President Reddy Godula and Vice President Dave
Overton will continue to manage Amega West’s operations.
“We are much stronger as a combined company,” said Godula.
“Carpenter’s advanced alloys paired with Amega West’s ability to
machine and service directional drilling equipment will enable us
to provide more responsive, one-stop service to customers within
this fast-growing market.”
About Carpenter Technology
Carpenter Technology produces and distributes conventional and
powder metal specialty alloys, including stainless steels, titanium
alloys, tool steels and superalloys. Information about Carpenter
can be found at www.cartech.com.
Forward-Looking Statements
Except for historical information, all other information in this
news release consists of forward-looking statements within the
meaning of the Private Securities Litigation Act of 1995. These
forward-looking statements are subject to risks and uncertainties
that could cause actual results to differ from those projected,
anticipated or implied. The most significant of these uncertainties
are described in Carpenter's filings with the Securities and
Exchange Commission including its annual report on Form 10-K for
the year ended June 30, 2010 and the quarterly report on Form 10-Q
for the quarter ended September 30, 2010 and the exhibits attached
to those filings. They include but are not limited to: the cyclical
nature of the specialty materials business and certain end-use
markets, including aerospace, industrial, automotive, consumer,
medical, and energy, or other influences on Carpenter's business
such as new competitors, the consolidation of competitors,
customers, and suppliers or the transfer of manufacturing capacity
from the United States to foreign countries; the ability of
Carpenter to achieve cost savings, productivity improvements or
process changes; the ability to recoup increases in the cost of
energy, raw materials, freight or other factors; domestic and
foreign excess manufacturing capacity for certain metals;
fluctuations in currency exchange rates; the degree of success of
government trade actions; the valuation of the assets and
liabilities in Carpenter's pension trusts and the accounting for
pension plans; possible labor disputes or work stoppages; the
potential that our customers may substitute alternate materials or
adopt different manufacturing practices that replace or limit the
suitability of our products; the availability of credit facilities
to Carpenter, its customers or other members of the supply chain;
the ability to obtain energy or raw materials; our manufacturing
processes are dependent upon highly specialized equipment located
primarily in one facility in Reading, Pennsylvania for which there
may be limited alternatives if there are significant equipment
failures or catastrophic event; our future success depends on the
continued service and availability of key personnel, including
members of our executive management team, management, metallurgists
and other skilled personnel and the loss of these key personnel
could affect our ability to perform until suitable replacements are
found; the ability to successfully integrate the Amega West
Services, LLC acquisition; the ability to achieve additional
opportunities for selling specialty alloys into the oil & gas
market; and the ability to expand Amega West’s manufacturing
capacity, rental fleet and service centers. Any of these factors
could have an adverse and/or fluctuating effect on Carpenter's
results of operations. The forward-looking statements in this
document are intended to be subject to the safe harbor protection
provided by Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
Carpenter undertakes no obligation to update or revise any
forward-looking statements.
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