Kennametal ( KMT - Get Report) signed a definitive agreement to sell its J&L Industrial Supply business to MSC Industrial Direct ( MSM - Get Report) for $349.5 million. J & L is a leading national specialty metalcutting and finishing distributor with fiscal year 2005 sales of $257.5 million, MSC said. The acquisition is not expected to have a material impact on MSC's fiscal 2006 results, and is expected to be neutral to theearnings per share through most of fiscal 2007, becoming accretive towards the end of fiscal 2007. The acquisition is expected to be highly accretive to MSC's results in fiscal 2008 and beyond as synergies are realized. MSC also said it expects net sales for the fiscal 2006 second quarter of between $305 million and $306 million, and diluted earnings per share of between 48 and 49 cents, including 3 cents of charges. Kennametal will recognize a $228.6 million pretax gain in the quarter ending June 30, boosting earnings per share by $3.25. The Latrobe, Pa.-based company immediately plans to accelerate its manufacturing rationalization opportunities. This investment is expected to have a cost impact of about 55 cents a share to 70 cents a share and a payback of less than three years. Proceeds from the sale will be used for possible acquisitions, a possible buyout of minority share interests in certain foreign subsidiaries, the repurchase of as many as 1.7 million shares, and debt reduction.