Timken Complete Sale of Latrobe Steel to Watermil Group

The Timken Company today announced it completed the sale of its Latrobe Steel subsidiary in Latrobe, Pa., to a group of investors led by the Watermill Group, Hicks Holdings and Sankaty Advisors. Timken received approximately $215 million in cash, providing resources for general corporate purposes, including strategic growth initiatives and pension funding.

"We are taking actions across our portfolio to increase the ability to generate consistent profitable growth," said James W. Griffith, Timken president and chief executive officer. "We believe the divestment of Latrobe Steel will create new opportunities for us to invest in key industrial markets that have the potential to generate greater value for our shareholders over time."

Latrobe Steel manufactures and distributes specialty steel for the aerospace, high speed, and tool and die markets.

Steven E. Karol, founder and managing partner of the Watermill Group, said, "Watermill has a long history of buying and helping businesses improve. Latrobe Steel is attractive to us due to its position in growing and profitable markets and its strong management team. Latrobe has manufacturing and distribution facilities that are up-to-date, well-maintained and that will support the company's continued growth. We look forward to partnering with Hicks, Sankaty and local management in this endeavor."

In 2005, The Timken Company had sales of $5.2 billion with $1.6 billion, excluding intersegment sales, from the company's Steel Group. Latrobe Steel sales, which have benefited from the strong aerospace and specialty steel markets, were $345 million or nearly 7 percent of the company's overall sales. In accordance with applicable accounting principles, the results of Latrobe Steel will be reclassified to discontinued operations for 2006 and preceding years.

For the first nine months of this year, the estimated impact on the Steel Group is approximately $266 million in sales and approximately $42 million in EBIT. The sale will have a negative impact on Timken's earnings in the near term.

"As with our recent sale of the precision steel components business in Europe and our intention to exit the tubing business in the United Kingdom, the sale of Latrobe Steel reinforces our focus on the alloy steel business," said Salvatore J. Miraglia Jr., president of Timken's Steel Group. "We invested in our alloy steelmaking capabilities during 2006, adding a new induction heat-treat line and expanding large-bar capacity, and will continue to look for opportunities to strengthen our portfolio in this core area going forward."

Latrobe Steel has more than 800 associates across the United States, including approximately 530 in Latrobe, Pa. Timken purchased Latrobe Steel in 1975 to have direct access to its coil-making capacity to support the company's bearing manufacturing. In recent years, Timken's declining demand for internally manufactured roller wire has decreased Latrobe Steel's synergy with the company's bearing business.

"For more than 30 years, the associates at Latrobe Steel have been part of The Timken Company," said Miraglia. "We are proud of this association and look forward to their continued growth under new ownership."

Latrobe Steel, headquartered in Latrobe, Pa, is a leading global producer and distributor of high-quality, vacuum remelted specialty steels and alloys. Latrobe Steel offers a comprehensive line of high-speed steels, tool and die steels, and high-strength aerospace-related specialty steels and alloys for technical niche applications. Through its two primary business units, Latrobe Steel Manufacturing and Latrobe Steel Distribution, the company produces and distributes more than 300 grades of specialty steels for use in aerospace applications, high-performance cutting tools, aluminum casting dies, extrusion and thread roll dies and other demanding applications.

Citations

Please use one of the following formats to cite this article in your essay, paper or report:

  • APA

    The Timken Co.. (2019, March 02). Timken Complete Sale of Latrobe Steel to Watermil Group. AZoM. Retrieved on March 01, 2024 from https://www.azom.com/news.aspx?newsID=7336.

  • MLA

    The Timken Co.. "Timken Complete Sale of Latrobe Steel to Watermil Group". AZoM. 01 March 2024. <https://www.azom.com/news.aspx?newsID=7336>.

  • Chicago

    The Timken Co.. "Timken Complete Sale of Latrobe Steel to Watermil Group". AZoM. https://www.azom.com/news.aspx?newsID=7336. (accessed March 01, 2024).

  • Harvard

    The Timken Co.. 2019. Timken Complete Sale of Latrobe Steel to Watermil Group. AZoM, viewed 01 March 2024, https://www.azom.com/news.aspx?newsID=7336.

Tell Us What You Think

Do you have a review, update or anything you would like to add to this news story?

Leave your feedback
Your comment type
Submit
Azthena logo

AZoM.com powered by Azthena AI

Your AI Assistant finding answers from trusted AZoM content

Your AI Powered Scientific Assistant

Hi, I'm Azthena, you can trust me to find commercial scientific answers from AZoNetwork.com.

A few things you need to know before we start. Please read and accept to continue.

  • Use of “Azthena” is subject to the terms and conditions of use as set out by OpenAI.
  • Content provided on any AZoNetwork sites are subject to the site Terms & Conditions and Privacy Policy.
  • Large Language Models can make mistakes. Consider checking important information.

Great. Ask your question.

While we only use edited and approved content for Azthena answers, it may on occasions provide incorrect responses. Please confirm any data provided with the related suppliers or authors. We do not provide medical advice, if you search for medical information you must always consult a medical professional before acting on any information provided.

Your questions, but not your email details will be shared with OpenAI and retained for 30 days in accordance with their privacy principles.

Please do not ask questions that use sensitive or confidential information.

Read the full Terms & Conditions.