8-KLeadership ChangesAcquisitions & DispositionsMaterial Agreements+3

CARPENTER TECHNOLOGY CORP 8-K Report, Material Agreement (Mar 1, 2012)

Filed March 1, 2012For Securities:CRS

Summary

Carpenter Technology Corporation (CRS) has officially completed its acquisition of Latrobe Specialty Metals, Inc. (Latrobe) through a merger. This significant strategic move, finalized on February 29, 2012, was executed via a wholly-owned subsidiary. The acquisition was financed through the issuance of 8.1 million shares of CRS common stock to Latrobe's stockholders and a cash payment of approximately $168 million to settle Latrobe's debt and related expenses. A portion of the issued stock was placed in escrow to cover indemnification and pension funding obligations related to Latrobe. In conjunction with the acquisition, Carpenter Technology has entered into new agreements with the principal equity holders of Latrobe, identified as the "Investors" (Hicks and the Watermill Group). These agreements include a Stockholders Agreement, which grants the Investors the right to appoint two directors to Carpenter Technology's Board of Directors, and a Registration Rights Agreement, enabling the Investors to register their Company securities for resale. These arrangements suggest a collaborative integration and potential influence from the former Latrobe owners on the future direction of Carpenter Technology.

Key Highlights

  • 1Completion of the acquisition of Latrobe Specialty Metals, Inc. by Carpenter Technology Corporation on February 29, 2012.
  • 2Acquisition financed through the issuance of 8.1 million shares of Carpenter Technology common stock and a cash payment of approximately $168 million.
  • 31,235,226 shares of common stock placed in escrow to secure indemnification and address pension funding issues of Latrobe.
  • 4New Stockholders Agreement grants former Latrobe equity holders the right to appoint two directors to Carpenter Technology's Board.
  • 5Registration Rights Agreement allows former Latrobe equity holders to register their Carpenter Technology shares for resale.
  • 6Board size expanded by two members to accommodate new director appointments from former Latrobe stakeholders.
  • 7Carpenter Technology will file financial statements and pro forma information for the acquired business within 71 days.

Frequently Asked Questions

This 8-K filing primarily announces the completion of Carpenter Technology Corporation's acquisition of Latrobe Specialty Metals, Inc. and details the material definitive agreements entered into in connection with the merger.

The acquisition was financed through a combination of Carpenter Technology issuing 8.1 million shares of its common stock to Latrobe's stockholders and a cash payment of approximately $168 million to cover Latrobe's debt and transaction-related expenses.

The Stockholders Agreement allows the former equity holders of Latrobe (Hicks and the Watermill Group) to appoint two directors to Carpenter Technology's Board of Directors. This expands the board and indicates that these key stakeholders will have direct representation and influence on the company's strategic decisions.

Carpenter Technology has stated that the required financial statements for the acquired business and pro forma financial information will be filed as soon as practicable, and in any event, no later than 71 days after the filing of this 8-K report.