RTI International Metals Inc. (RTI) to be Acquired by Alcoa in $1.5B Deal

Shares of RTI International Metals Inc. (RTI) were trading up +12.72 or +46.63 percent to $40.00 per share in Monday's premarket after news broke that the company had entered into a definitive agreement to be acquired by Alcoa Inc. (AA). RTI International Metals Inc. stock closed at $27.28 per share, down -0.54 or -1.94 percent in Friday's regular trading session.

Founded in 1950, Pittsburgh, Pennsylvania based RTI International Metals Inc. is a leading producer of titanium mill products, metal components and engineered systems for the defense, aerospace, industrial, energy and chemical industries.
In the United States, the company operates facilities in California, Connecticut, Indiana, Missouri, Mississippi, Pennsylvania, Texas, Virginia and Utah. Internationally, the company operates in Canada, the United Kingdom, France, Germany, Italy and China.

New York, New York based Alcoa Inc. was originally founded in Pittsburgh, Pennsylvania in 1888 â?? its operational base is still in Pittsburgh â?? as the Aluminum Company of America. The company is the world's third largest producer of aluminum. In addition to smelting, manufacturing and recycling primary aluminum, fabricated aluminum and alumina, Alcoa also makes precision castings and industrial fasteners for the aerospace industry. Alcoa's products are used in a wide variety of industries including automobiles, aircraft, packaging, oil and gas, building and construction and industrial and defense applications. The company operates in 31 countries worldwide and employs over 60,000 people.

The terms of the agreement will have Alcoa acquire all of RTI's outstanding shares in a stock for stock deal, with RTI shareholders receiving 2.8315 Alcoa shares for each RTI share, which works out to approximately $41 per RTI share based on Alcoa's closing price on Friday, March 6th. The value of the transaction works out to approximately $1.5 billion including $330 million in RTI's cash on hand and as much as $571 million worth of RTI convertible notes.

Dawne Hickton, Vice Chair, President and Chief Executive Officer of RTI International Metals said in the company's press release that, "Innovation and scale are critical to winning in both the titanium and aerospace industries today, which is why this transaction is such a natural strategic fit for both RTI and Alcoa. We are pleased to have an agreement with Alcoa that delivers immediate value to our shareholders that appropriately reflects the strength of our business. Through this combination of forces, RTI will take its innovative technologies to the next level and deliver even more value-add titanium solutions to meet customer needs. We look forward to continuing to accelerate RTI's success as a part of the Alcoa team."

Alcoa expects the transaction to generate realized net synergies of approximately $100 million and for RTI to contribute as much as $1.2 billion in revenue by 2019 compared to $794 million generated in 2014. The acquisition will enable Alcoa to participate in the growing commercial and aerospace market, with a market growth of 5 to 6 percent through 2019.

The deal has been approved by the boards of both companies and is subject to the customary shareholder and regulatory approvals. Both companies expect to obtain all required regulatory clearances and shareholder approvals to close the transaction within three to six months.

 Other News About RTI
Record titanium shipments strengthen RTI's revenue, earnings
Company reported it had produced 6.7 million pounds of titanium in the fourth quarter.

RTI International Metals Reports Fourth Quarter and Full Year 2014 Financial Results
RTI reported record quarterly sales and titanium mill product shipments.

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Published on Mar 9, 2015
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2020. Content published with author's permission.

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