Alcoa Closes Acquisition Of RTI International Metals - Quick Facts

(RTTNews) - Alcoa (AA) announced that it has completed the acquisition of RTI International Metals Inc. (TI), a global leader in titanium and specialty metal products and services for the aerospace, defense, energy and medical device markets. The merger, announced on March 9, became effective today.

As per the terms of the merger 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.

Alcoa expects RTI to contribute $1.2 billion in revenue in 2019, up from $794 million that RTI generated in 2014, with 65 percent of revenues supported by contracts over the next five years. RTI's profitability is expected to reach 25 percent EBITDA margin in 2019.

Under the agreement, Alcoa will supply titanium parts for the fuselage, among other components.

Alcoa expects global aerospace sales growth of 8 to 9 percent in 2015. Projections for 2016 and 2017 sales growth have nearly doubled to 8 and 13 percent, from 4 to 5 percent and 6 percent, respectively, showing the ongoing strength of the sector. Eighty percent of RTI's revenues in 2014 were from the aerospace and defense industries. With RTI, Alcoa's 2014 pro forma aerospace revenue increases by 13 percent to $5.6 billion.

In addition, Alcoa announced a realignment of its downstream segment as the Company's value-add portfolio expands. Alcoa's downstream portfolio will become two segments, one with a core focus on aerospace, and the other centered on the construction and commercial wheels markets. The realignment supports Alcoa's transformation strategy to build its value-add portfolio for greater profitability.

External reporting for Alcoa's new Transportation and Construction Solutions segment will begin in third quarter 2015.