Expands Global Growth Platform for Titanium Aerospace Components
NEW YORK & BESTWIG, Germany--(BUSINESS WIRE)--Lightweight, high-performance metals leader Alcoa (NYSE: AA) today announced that it has completed the acquisition of privately held TITAL. Alcoa closed the transaction, which was announced on December 15, 2014, after receiving all of the required global regulatory approvals.
TITAL is a leading manufacturer of titanium and aluminum structural castings for aircraft engines and airframes. This acquisition strengthens Alcoa’s ability to capture growing demand for advanced aircraft engine components, in particular, those made of titanium. TITAL establishes titanium casting capabilities in Europe for Alcoa, and expands the Company’s aluminum casting capacity. Additionally, TITAL’s strong connections to European engine and aircraft manufacturers such as Airbus, SNECMA, and Rolls-Royce, will enhance Alcoa’s customer relationships in the region and beyond.
“We are combining two leading, innovation-driven businesses to continue increasing Alcoa’s highly differentiated content on the world’s best-selling airplanes and jet engines,” said Olivier Jarrault, Executive Vice President and Alcoa Group President, Engineered Products and Solutions. “This transaction supports our strategy of creating a more profitable future by growing our value-add businesses. Through these efforts, Alcoa will continue delivering greater sustainable value for our customers, employees and shareholders.”
With TITAL, Alcoa is well positioned to capitalize on strong demand growth in the commercial aerospace sector. Alcoa sees a current 8-year production order book at 2014 delivery rates. Almost 70 percent of TITAL’s revenues are expected to come from commercial aerospace sales in 2019. Further, its titanium revenues are expected to increase by 70 percent over the next five years as manufacturers of next-generation jet engines look to titanium solutions for engine structural components. In 2014, TITAL generated revenues of approximately €77 million (approximately US$100 million), more than half of which came from titanium products.
Alcoa is implementing a robust integration plan to support TITAL’s growth and to further improve productivity, primarily driven by procurement, internal metal supply, manufacturing optimization and leveraging Alcoa’s global shared services. TITAL’s business is being integrated into Alcoa’s Engineered Products and Solutions (EPS) segment.
Alcoa has been aggressively growing its aerospace business as part of the Company’s broader transformation. In 2014, Alcoa completed the acquisition of global jet engine component leader Firth Rixson. This was the first of two announced acquisitions, including the TITAL transaction. Alcoa also announced investments to expand jet engine parts production in Indiana and Virginia, opened the world’s largest aluminum-lithium facility in Indiana, and in Michigan, plans to expand its coatings capabilities for jet engine components. In addition, the Company announced plans to install advanced aerospace plate manufacturing capabilities in Iowa. It also announced in 2014 supply deals exceeding $2 billion with Boeing and Pratt & Whitney, which included the world’s first forging for an aluminum fan blade for Pratt & Whitney’s PurePower® jet engines. The PurePower engine will be used to power some of the world’s highest volume aircraft, including the next-generation Airbus A320neo.
Alcoa’s aerospace business holds the number one global position in aluminum forgings and extrusions, jet engine airfoils and fastening systems and is a leading supplier of structural castings made of titanium, aluminum and nickel-based superalloys and aluminum sheet and plate. It also holds the number one global position in seamless rolled jet engine rings, engineered from nickel-based superalloys and titanium, and is one of the world’s leading suppliers of vacuum melted superalloys used to make aerospace, industrial gas turbine, oil and gas products and structural components for landing gear applications. It also has entered into a highly specialized segment of jet engine forgings that require isothermal forging technology.
A global leader in lightweight metals technology, engineering and manufacturing, Alcoa innovates multi-material solutions that advance our world. Our technologies enhance transportation, from automotive and commercial transport to air and space travel, and improve industrial and consumer electronics products. We enable smart buildings, sustainable food and beverage packaging, high-performance defense vehicles across air, land and sea, deeper oil and gas drilling and more efficient power generation. We pioneered the aluminum industry over 125 years ago, and today, our approximately 59,000 people in 30 countries deliver value-add products made of titanium, nickel and aluminum, and produce best-in-class bauxite, alumina and primary aluminum products. For more information, visit www.alcoa.com, follow @Alcoa on Twitter at www.twitter.com/Alcoa and follow us on Facebook at www.facebook.com/Alcoa.
This release contains statements that relate to future events and expectations and as such constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those containing such words as “anticipates,” “expects,” “forecasts,” “intends,” “plans,” “projects,” “sees,” “should,” “targets,” “will,” or other words of similar meaning. All statements that reflect Alcoa’s expectations, assumptions or projections about the future other than statements of historical fact are forward-looking statements, including, without limitation, statements regarding the expected impact of the acquisition of TITAL on Alcoa’s financial results and its global position to capture demand for advanced aircraft engine components, including those made of titanium, TITAL’s expected increase in revenues from titanium, the expected expansion of Alcoa’s global aerospace business, forecasts concerning demand growth in the commercial aerospace sector, the expected size, scope and growth of the combined company’s operations, anticipated enhancements to Alcoa’s customer relationships in Europe as a result of the acquisition, and the other expected benefits of the transaction. These statements reflect beliefs and assumptions that are based on Alcoa’s perception of historical trends, current conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances. Forward-looking statements are subject to a number of known and unknown risks, uncertainties, and other factors and are not guarantees of future performance. Important factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements include: (a) deterioration in global economic and financial market conditions generally; (b) unfavorable changes in the markets served by Alcoa, including aerospace; (c) increases in the costs of raw materials; (d) political, economic, and regulatory risks in the countries in which Alcoa and TITAL operate or sell products; (e) the risk that TITAL will not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected; (f) the possibility that certain assumptions with respect to TITAL could prove to be inaccurate; (g) the loss of key employees, customers, suppliers and other business relationships of Alcoa or TITAL as a result of the acquisition; and (h) the other risk factors summarized in Alcoa’s Form 10-K for the year ended December 31, 2014, and other reports filed with the Securities and Exchange Commission. Alcoa disclaims any obligation to update publicly any forward-looking statements, whether in response to new information, future events or otherwise, except as required by applicable law.