Shares of Titanium Metals Corp. (NYSE: TIE), a producer of titanium melted and mill products, are soaring today after the company agreed to be acquired by Precision Castparts Corp. (NYSE: PCP).
As per the terms of the agreement, PCP will acquire TIRE for $16.50 per share in an all cash transaction. The offer price from PCP represents a premium of 36% over the 30-day average of TIE shares and a 44% premium over the closing price of TIE shares on November 8, 2012.
The transaction, which is expected to be completed in December 2012, has been approved by the Board of Directors of PCP. The Board of Directors of TIE established a special committee that includes independent members of board which, with the help of legal and financial advisors, evaluated, negotiated and determined that the agreement with PCP and the tender offer were advisable, fair and in the best interest of TIE and its shareholders.
TIE has also released its third-quarter financial results. For the quarter ended September 30, 2012, TIE reported net income of $18.6 million, or $0.11 per share, compared to $25 million, or $0.14 per share reported for the same period in the previous year. Net sales for the quarter were $257.7 million, compared to $262.5 million reported for the same period in the previous year.
Bob O’Brien, President and CEO of Titanium Metals, said that the commercial aerospace sector is poised for sustained growth over the next several years as announced production rates for next-generation airframes and engines are achieved. O’Brien further said that record backlogs for commercial aircraft manufacturers reflect the demand for global fleet replacement and expansion, which will drive significant titanium demand for the company’s business for years to come.
At last check, TIE shares were trading 42.52% higher at $16.49 on above average volume of 34.57 million. PCP shares, meanwhile, were up 4.92% to $179.76 on above average volume of 2.01 million, at last check.
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