Alcoa purchases RTI

Staff report

NILES

A leading titanium company that was based in Weathersfield Township for more than 50 years will be purchased by a leading metals company for $1.5 billion.

On Monday, Alcoa announced a definitive agreement with RTI International Metals Inc., which moved its Weathersfield headquarters to Pittsburgh in 2008.

“Alcoa is accelerating its value-added growth engine by acquiring titanium leader RTI,” said Klaus Kleinfeld, Alcoa chairman and CEO, in a news release. “We are combining two innovators in materials science and process technology, shifting Alcoa’s transformation into a higher gear.”

Under the terms of the agreement, Alcoa will acquire all outstanding shares of RTI in a stock-for-stock transaction. RTI shareholders will receive 2.8315 Alcoa shares for each RTI share, representing a value of $41 per RTI share based on Alcoa’s closing price March 6, 2015. The transaction has an enterprise value of $1.5 billion, including $330 million of RTI cash on hand and up to $517 million in RTI’s convertible notes.

With the acquisition completed in three to six months comes growth in several areas for Alcoa — a company that employs 59,000 in 30 countries. Expected areas of growth include the commercial aerospace sector.

Eighty percent of RTI’s $794 million revenue in 2014 was from the aerospace and defense industries.

RTI will bring the company more titanium capabilities. RTI is expected to increase Alcoa’s nonaluminum downstream revenues by 64 percent.

RTI also is expected to enhance Alcoa’s additive- manufacturing capabilities, such as 3-D printing to produce titanium, speciality metals and plastic parts for aerospace, medical and energy applications. Spending on titanium is expected to grow 5 percent annually over the next five years.

The New York-based Alcoa foresees RTI contributing $1.2 billion in revenues in 2019.

RTI has a local plant in Niles where 500 are employed. Media representatives for both Alcoa and RTI would not go beyond the detail in Monday’s announcement on how the local plant might be impacted by the acquisition.

RTI also has three plants in Canton.