Pittsburgh-based Allegheny Technologies Inc. has agreed to sell its Cast Products business to Consolidated Precision Products Corp. of Cleveland. CPP, which operates 16 global facilities manufacturing products primarily for the aerospace, defense and industrial industries, is a portfolio company of global PE firm Warburg Pincus.
The transaction, subject to regulatory approvals, is expected to close in the early part of the third quarter 2019.
The Cast Products business unit is part of ATI’s High Performance Materials & Components segment. It produces titanium investment castings that are primarily used by aerospace and defense OEMs in the production of commercial jet airframes and engines. A post-casting machining facility in Salem, Oregon, will remain with ATI and provide services to CPP and others.
The gross cash proceeds will be used to further ATI’s capital deployment priorities, principally improving its balance sheet by reducing corporate debt levels and funding its pension obligations, as well as building its strategic cash reserves over time. ATI’s third quarter 2019 results will likely include a modest gain from this transaction.