Allegheny Technologies (ATI - Free Report) has bought specialty parts maker Dynamic Flowform Corp. for an undisclosed price. The move is in sync with the Pennsylvania-based metals processor’s strategy to boost its capabilities to make specialty materials parts and components.
Billerica, MA-based Dynamic Flowform leverages a precision flowforming process to make thin-walled components in net or near-net shapes using a host of alloy systems including nickel-based alloys and superalloys, titanium and titanium alloys and zirconium alloys.
Dynamic Flowform’s key markets are aerospace and defense and the oil and gas/chemical process industry. Some of its major products are airframe and jet engine components, oil and gas drilling and completion tools from hollows.
The buyout is expected to be immediately accretive to Allegheny. The company sees significant growth potential for Dynamic Flowform’s products across aerospace and oil and gas markets.
Allegheny, which is among the prominent players in the U.S. specialty steel industry along with Carpenter Technology (CRS - Free Report) , Precision Castparts and Haynes International (HAYN - Free Report) , should benefit from its diversified global growth markets and differentiated product mix. It is witnessing improving demand from aerospace OEMs and is effectively managing its cost structure.
Allegheny envisions business conditions to gradually improve through 2014. The company anticipates market conditions to remain favorable across many of its major markets over the next 2-5 years. However, it expects modest recovery in global economic conditions.
Moreover, Allegheny expects continued increase in aerospace build rates. It expects capital spending on global oil and gas exploration and production forecasts project to remain strong.
However, Allegheny is still contending with a soft global economy. Reduced raw material surcharges and low base prices for standard stainless products continue to hurt results in the company’s Flat-Rolled Products division.
Allegheny is a Zacks Rank #4 (Sell) stock.