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Specialty metals productmaker, Allegheny Technologies Incorporated (ATI - Analyst Report) completed the acquisition of Ladish Co. Inc. for cash and stock of approximately $883 million for expanding its offerings in the aerospace sector.

As per the agreement, Ladish investors will receive $24 in cash and 0.4556 of Allegheny’s common stock. The deal was finalized pursuant to the terms of an agreement and plan of merger adopted by Ladish shareholders at a special meeting held on May 6, 2011.

With the addition of Ladish, Allegheny will be able to build its metals business, which includes the production of specialty steels, nickel-based alloys and castings.

Ladish, which is a major customer of Alleghey’s titanium and nickel business, manufactures a range of highly specialized metal parts for the aerospace industry and the larger industrial market. Allegheny currently has a much smaller presence in the engineered products sector, for example, it makes fasteners and shafts for Rolls Royce jet engines..

Recently, Allegheny reported its first-quarter 2011 results. Net income came in at $56.3 million, or 54 cents per share, surpassing the Zacks Consensus Estimate of 49 cents and last year's $18.2 million, or 18 cents per share. First-quarter results were impacted by $5.8 million, or $0.05 per share, for previously announced executive retirements and a discrete tax item.

Quarterly revenues soared 36.5% year over year to $1.23 billion from $899.4 million driven by higher shipments and rising raw material prices. Revenues were above the Zacks Consensus Estimate of $1.12 billion.

Segment wise, revenue increases were distinct in the Engineered Products segment (46%) and in the Flat-Rolled Products segment (38%), while sales in the Higher Performance Material segment increased (32%).

Based in Pittsburgh, PA, Allegheny Technologies Inc. is one of the largest and most diversified specialty materials producers in the world. The aerospace market has started recovering, boosting the demand for Allegheny’s products.

Separately, Allegheny has been arresting cost-pressures associated with high raw material costs by implementing price hikes through surcharges. The High Performance Metals segment internally sources sponge, which is processed for use in titanium and titanium alloys, and zirconium and hafnium alloy products. The Engineered Products segment is also similarly integrated. Moreover, Allegheny’s integrated business model provides a competitive advantage.

The company’s competitors include Carpenter Technology Corp. (CRS - Snapshot Report) and Sutor Technology Group Limited .

Currently, Allegheny holds a short-term (1 to 3 months) Zacks #1 Rank (Strong Buy) and a long-term Neutral recommendation.

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