8-KMaterial AgreementsRegulation FDExhibits & Filings

CARPENTER TECHNOLOGY CORP 8-K Report, Material Agreement (Jun 21, 2011)

Filed June 21, 2011For Securities:CRS

Summary

Carpenter Technology Corporation (CRS) announced on June 20, 2011, that it has entered into a definitive Agreement and Plan of Merger to acquire Latrobe Specialty Metals, Inc. The acquisition will be structured as a merger where Latrobe will become a wholly owned subsidiary of Carpenter Technology. This strategic move aims to expand Carpenter Technology's product offerings and market reach within the specialty metals sector. Key terms of the transaction include the issuance of approximately 8.1 million shares of Carpenter Technology's common stock to Latrobe's stockholders, subject to certain adjustments. The company will also assume Latrobe's third-party indebtedness, with potential adjustments to the stock consideration if indebtedness exceeds $160 million. A portion of the shares issued will be placed into escrow to cover indemnification obligations and pension funding issues related to Latrobe, with phased releases over time. The agreement is subject to customary closing conditions, including antitrust approvals.

Key Highlights

  • 1Carpenter Technology Corporation is acquiring Latrobe Specialty Metals, Inc. through a merger.
  • 2The acquisition will be paid for through the issuance of approximately 8.1 million shares of CRS common stock to Latrobe's stockholders.
  • 3The number of shares issued may be adjusted based on Latrobe's working capital and indebtedness.
  • 4Carpenter Technology will assume Latrobe's third-party indebtedness, with a threshold of $160 million impacting share consideration.
  • 5A portion of the merger consideration will be held in escrow to secure indemnification obligations and address pension funding issues.
  • 6The transaction is subject to standard closing conditions, including antitrust approvals (Hart-Scott-Rodino Act).
  • 7Certain Latrobe stockholders will gain the right to appoint two directors to Carpenter Technology's board for a period.

Frequently Asked Questions

This 8-K filing announces the entry into a material definitive agreement, specifically an Agreement and Plan of Merger, between Carpenter Technology Corporation and Latrobe Specialty Metals, Inc. It details the key terms of the proposed acquisition.

The acquisition is primarily financed through the issuance of approximately 8.1 million shares of Carpenter Technology's common stock to Latrobe's stockholders. The company will also assume Latrobe's outstanding debt, which could adjust the share consideration.

The merger is subject to customary closing conditions, including the receipt of applicable antitrust approvals (such as under the Hart-Scott-Rodino Antitrust Improvements Act), and satisfaction or waiver of other conditions outlined in the Merger Agreement. Due diligence findings may also impact the transaction.

Two escrow accounts are established: an indemnity escrow ($50 million worth of stock) to cover potential claims related to Latrobe's representations and warranties, and a pension escrow (300,000 shares) to address Latrobe's pension funding issues. These shares will be released over time based on specific conditions and periods.