Carpenter Technology Acquires Amega West Services
January 1, 2011Carpenter Technology Corp. (NYSE:CRS) has announced it has acquired Amega West Services LLC, a Houston-based manufacturer and service provider of complex components for directional drilling equipment.
The business was purchased from a group consisting of Energy Special Situations Funds, other investors and certain Amega West employees for approximately $54 million. The acquisition provides Carpenter with additional opportunities for selling specialty alloys into the growing oil and gas market. The transaction is expected to be modestly accretive to earnings in fiscal year 2011.
“We view energy as one of our fastest growing end-markets and we are expanding our portfolio of target applications in oil and gas and power generation,” said William A. Wulfsohn, president and CEO of Carpenter Technology. “In particular, we believe that global oil and gas demand will continue to rise and directional drilling activity, which uses a variety of our specialty alloys, will increase. This acquisition enables us to accelerate our participation in the growth of directional drilling and speeds up introduction of new alloys into the market.”
Amega West is a leading manufacturer of high-precision components for measurement while drilling (MWD) and logging while drilling (LWD), drill collars, stabilizers and other downhole tools used for directional drilling, which reduces the cost and environmental impact of oil and gas production.
Carpenter Technology currently supplies alloys to Amega West. Carpenter’s industry-leading product portfolio of specialty alloys combined with Amega West’s capabilities in manufacturing components and tools used in directional drilling creates a more integrated, value-added supply chain for customers in the oil and gas market. Carpenter plans to expand Amega West’s manufacturing capacity at its Tyler, Texas, facility, as well as the rental fleet and the footprint of the company’s five North American service centers.
Amega West president Reddy Godula and vice president Dave Overton will continue to manage Amega West’s operations.