Expanding Horizons With New Acquisitions - Report on Alcoa Inc.

Aug 11, 2015, 09:00 ET from www.aciassociation.com

NEW YORK, August 11, 2015 /PRNewswire/ --

ACI Association has initiated research coverage on Alcoa Inc. (NYSE: AA). Select highlights from the internally released reports are being made available to the general public (included below), with access to the entirety of the research available to new members.

Today, membership is open to readers on a complementary basis at the following URL: http://www.aciassociation.com/?c=AA

Highlights from our AA Report include:

  • Recent Transaction - On July 23, 2015, Alcoa Inc. announced that it has completed the acquisition of RTI International Metals, Inc. The Company had initially announced the transaction on March 9, 2015. Under the agreement, each share of RTI common stock has been converted into the right to receive 2.8315 shares of Alcoa common stock, plus an amount of cash in lieu of fractional shares of Alcoa common stock.
  • Expansion of Aerospace Portfolio - With the acquisition of RTI, Alcoa expands its reach into titanium, which is the fastest growing aerospace material in the world. RTI's titanium operations span midstream processes such as melting, ingot casting, bloom, billet, plate and sheet production; and downstream extrusions for aerospace, oil and gas applications, high speed machining, and production of integrated subassemblies primarily for aerospace. These capabilities complement Alcoa's titanium investment casting and forging capabilities, and enable a value-creating closed titanium scrap loop. This deal also adds RTI's advanced technologies and materials capabilities for greater innovation power in aerospace to the Company's portfolio.
  • Positive Impact on Financials -RTI is expected to contribute about $1.2 billion to the Company's revenue in 2019, up from the $794 million generated by RTI in 2014, with about 65% of the revenues supported by contracts over the next five years. According to the announcement, contracts that underpin RTI's growth include a contract with Airbus for finished titanium structural supply parts for its new A350-1000 aircraft program. Also, this transaction positions Alcoa to capitalize on strong growth in the commercial aerospace sector as about 80% of RTI's revenues in 2014 were from the aerospace and defense industries. Further, with RTI, Alcoa's 2014 pro forma aerospace revenue increases by 13% to $5.6 billion.
  • Business Integration - According to the announcement, RTI is being integrated into Alcoa's downstream Engineered Products and Solutions (EPS) segment as a standalone business unit. This new business unit, called Alcoa Titanium & Engineered Products (ATEP), which will be led by Eric Roegner who has been named President of ATEP.
  • Management Comments- Sharing his views on the merger, Klaus Kleinfeld, the Chairman and CEO of Alcoa said, "Today, Alcoa takes its multi-material aerospace portfolio to greater heights than ever before. By combining the talent and advanced technology of RTI and Alcoa, we significantly increase Alcoa's aerospace market reach."

To find out how this influences our rating on Alcoa Inc. read the full report in its entirety here: http://www.aciassociation.com/?c=AA


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