Jan 4 2007
Kennametal Inc. announced today that it has signed a definitive agreement with Federal Signal Corporation to purchase the firm's cutting tool business comprised of Manchester Tool Company, ClappDiCO Corporation and On Time Machine, Inc. (OTM) for approximately $67 million.
Closing is planned for late January or early February 2007 and remains subject to customary regulatory approvals and negotiated conditions of closing. The acquisition is expected to be accretive to earnings within the next twelve months. </p><p>Acquisitions in Kennametal's core businesses are conducted according to a disciplined process that is part of the company's management operating system known as the Kennametal Value Business System (KVBS). This acquisition is consistent with Kennametal's growth strategy and with the company's previously stated intentions for the use of cash.
With annual sales of approximately $40 million, Federal Signal Corporation's cutting tool business produces, markets and services super hard polycrystalline diamond and cubic boron nitride cutting tools, tool holding systems and certain specialized turning tools which are complementary to Kennametal's product range.
"We are pleased to add yet another component to our metalworking business that will better enable us to serve our customers globally," commented Ron Keating, Corporate Vice President and President Metalworking Solutions and Services Group. "These technologies are an exciting addition to our current metalcutting capabilities and will provide additional opportunities for us to serve rapidly growing industry segments such as aerospace, energy and die and mold," he continued. "This bolt-on acquisition helps us to further round out our portfolio in high value niche segments, expanding our existing product lines and our reach into new markets."