North Shore-based aerospace parts maker Arconic is being purchased by private-equity firm Apollo Global Management Inc., the company announced Thursday.
The cash transaction values Arconic at an enterprise value of about $5.2 billion, according to a press release from the company.
Under the agreement, Arconic shareholders will receive $30 per share in cash. Once the transaction is completed, Arconic’s shares will no longer trade on the New York Stock Exchange and it will become a private company.
“This transaction represents a realization of value for Arconic shareholders at a meaningful premium and enables the company to execute its long-term strategic vision,” Fritz Henderson, chairman of the company’s board of directors, said.
He said the board approved the sale “after thorough and thoughtful review of a range of value creation opportunities for shareholders.”
Arconic spun out of Pittsburgh-based Alcoa in 2016. Alcoa kept the company’s aluminum commodity business, while Arconic took the aerospace and automotive aspects of the company.
The Alcoa Technical Center off Route 780 in Upper Burrell was renamed the Arconic Technology Center.
In 2020, Arconic split into two businesses. Howmet Aerospace focused on engineering products, and Arconic focused on rolled aluminum products, extrusions and building and construction solutions.
“In the more than three years since we became a standalone company, we have shown the capabilities and potential of Arconic’s employees and assets,” CEO Tim Myers said. “Our unique product portfolio in an industry with significant potential for growth across the markets we serve positions us to deliver substantial value to our customers and the end users of our products.”
Myers said the transaction will provide Arconic “with the backing of one of the world’s premier investment firms and will allow us to leverage Apollo’s industry expertise and relationship to pursue our long-term strategic goals.”
“Arconic’s talented management team and employees operate a set of premier global assets serving markets that are growing,” said Gareth Turner, partner at Apollo Global Management. “We are committed to investing significant capital in the company to secure its competitive position and world-class product offering to continue building on Arconic’s journey.”
Strategic investments are scheduled to include upgrades to machine centers, technology upgrades and investments in projects that provide a cleaner environment in the communities where Arconic operates, the company said.
Ital Wallach, partner at Apollo, said they are “fully committed to continuing Arconic’s unwavering support for its employees throughout the world through a strong culture of employee engagement, respecting and protecting the collective bargaining process and by focusing on and strengthening the security of the company’s pension plans.”
The transaction is expected to close in the second half of this year.
