Alcoa to acquire Firth Rixson to grow global aerospace portfolio

• $2.85 billion acquisition, $2.35 billion in cash, $500 million common stock; additional $150 million potential earn-out
• Significantly accelerates Alcoa’s portfolio transformation, builds out value-add business, grows innovation capabilities and broadens multi-material product mix
• Increases Alcoa’s 2013 pro forma aerospace revenue by 20 percent to $4.8 billion and expands product suite in growing jet engine segment
• Expected to contribute incremental $1.6 billion revenues and $350 million EBITDA in 2016
• Firth Rixson’s sales are expected to grow through 2019 at a rate more than double the global aerospace market
• Expected annual synergy cost savings of more than $100 million by year five

Alcoa has announced it is significantly accelerating its portfolio transformation. The Company has signed a definitive agreement to acquire Firth Rixson, a global leader in aerospace jet engine components, from Oak Hill Capital Partners, for $2.85 billion in cash and stock. Under the terms of the deal, Alcoa will purchase Firth Rixson for $2.35 billion in cash, plus $500 million of Company stock and an additional $150 million potential earn-out.

The acquisition further strengthens Alcoa’s robust aerospace business. It positions the Company to capture additional aerospace growth with a broader range of high-growth, value-add jet engine components. The acquisition is strategically aligned with the Company’s objective to continue to build its value-add businesses.

“The acquisition of Firth Rixson is a major milestone in Alcoa’s transformation,” said Klaus Kleinfeld, Alcoa Chairman and Chief Executive Officer. “This transaction will bring together some of the greatest innovators in jet engine component technology; it will significantly expand our market leadership and growth potential. Firth Rixson increases the earnings power and broadens the market reach of our high-value aerospace portfolio and will deliver compelling and sustainable value for customers and shareholders.”

“We at Oak Hill Capital have worked closely with the Firth Rixson team, led by CEO David Mortimer, to create long-term strategic value,” said Denis J. Nayden, Managing Partner of Oak Hill Capital. “By investing in new capabilities and technology in partnership with the leading aerospace engine customers, we strengthened Firth Rixson’s global leadership and built a business with strong growth, a large backlog of booked business and significant further potential. We are excited about the equity we are receiving in Alcoa and confident that the combination of Alcoa and Firth Rixson will achieve great success as a strategic supplier to the world’s best aerospace companies.”