LATROBE, Pa., Nov. 6, 2013 /PRNewswire/ -- During its Analyst Day event, Kennametal Inc. (NYSE: KMT) today shared detailed plans for integration synergies expected as it combines the Tungsten Materials business acquired from Allegheny Technologies Incorporated (NYSE: ATI) with Kennametal's Industrial and Infrastructure segments.
Kennametal completed the $605 million transaction on Monday, Nov. 4. The acquired business, which employs approximately 1,175 people, brings industry-leading tungsten carbide production and recycling capabilities, as well as a tooling and product portfolio with a strong position in aerospace, energy and process industries.
Stressing opportunities to achieve synergies across Kennametal and the acquired business, management projected integration costs of approximately $40 to $50 million through fiscal 2016, while it expects to realize annual savings of approximately $35 to $45 million, across three main areas as follows:
- Concentrating the Footprint: Consolidating operations among both organizations, while driving productivity improvements with standardized processes;
- Reducing Administrative Overhead: Reducing selling, general and administrative expense, increased sourcing efficiencies; and
- Leveraging the Supply Chain: Combining supply chains, including raw-material costs; procurement; and streamlined manufacturing and distribution logistics.
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