The Timken Company, Canton, OH, has sold its Latrobe Steel subsidiary in Latrobe, PA, to a group of investors led by the Watermill Group, Hicks Holdings and Sankaty Advisors for $215 million in cash.
“We are taking actions across our portfolio to increase the ability to generate consistent profitable growth,” said James W. Griffith, Timken president and CEO. “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.
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% of the company’s overall sales.
“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.”
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.
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