US-based Alcoa, has agreed to buy Sheffield-based Firth Rixson, the Sheffield-based global aerospace and engineering company, for a reported £1.67bn.
Well known for its mining business, Alcoa is also a leading aerospace manufacturing business which recently invested $25m at its Alcoa Power and Propulsion facility in Hampton, Virginia. The investment was made to scale-up a breakthrough process technology that cuts the weight of its highest-volume jet engine blades by 20% and significantly improves aerodynamic performance.
The deal between Firth Rixson and Alcoa is expected to further bolster annual sales at Alcoa’s aerospace unit by 20%. The unit is Alcoa’s biggest so-called value-added business, supplementing its traditional metals operations.
Firth Rixson employs 2,400 across 12 facilities worldwide including four in Sheffield and two in Derbyshire at Darley Dale and Glossop employing 900 people in total.
In the last 10 years the company has seen sales grow from $300m to more than $1bn today.
Chief financial officer Peter Bland said: “It’s excellent news for Firth Rixson and for Alcoa, we have had remarkable growth over the last 10 years. We needed a strategic partner for the next stage of growth. This investment will ensure the business will continue to grow for the next few years.”
Under the terms of the deal, Alcoa will pay $2.35bn in cash and $500m in stock to Firth Rixson’s owner, the investment firm Oak Hill Capital Partners. It could pay up to an additional $150m if Firth Rixson hits certain performance targets.
Firth Rixson makes products like seamless rolled jet engine rings and specialized superalloys for industrial turbines and oil and natural gas equipment.