Ladish Co. (LDSH) surged by 60 percent on Wednesday, printing the biggest gain in the R2K Index. The aerospace parts maker said it agreed to be bought by rival Allegheny Technologies Inc. (ATI) in a cash and stock transaction worth about $778 million.
The deal, valued at $48 per share, is a 63.6% premium to Ladish stock’s Tuesday’s close of $29.33. According to a statement released by ATI, Ladish shareholders will receive $24 cash and 0.4556 shares of Allegheny common stock for each of their shares.
“Our strategy is to build unsurpassed manufacturing capabilities and develop innovative new products that add value for our customers,” ATI Chief Executive Officer L. Patrick Hassey said in the statement.
The acquisition is expected to add to Allegheny earnings after the first year.
“Ladish expects sales of approximately $400 in revenue this year and anticipates that the sales will continue to grow with the aerospace market recovery”, Allegheny said.
At last check, Ladish shares were up $16.50 to $45.83, a gain of 56.26%. More than 5.8 million LDSH shares have already traded hands compared to a daily average of around 87K. The shares increased 95% this year through yesterday.
ATI fell 59 cents, or 1.18 percent, to $49.35. About 3.3 million shares changed hands as of 12:20 am EST.