SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report - January 6, 1997
(Date of Earliest Event Reported)
Carpenter Technology Corporation
(Exact Name of Registrant as specified in its charter)
Delaware 1-5828 23-0458500
(State of Incorporation) (Commission File No.) (IRS Employer ID No.)
101 West Bern Street, Reading, Pennsylvania 19601
(Address of principal executive offices)
Registrant's telephone number, including area code: 610-208-2000
The Exhibit Index is located on Page 4 of 7.
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Item 5. Other Events.
The Registrant announced on January 7, 1997, that on January 6, 1997, the
Registrant executed an Agreement and Plan of Merger with Dynamet Incorporated
("Dynamet") to acquire all of the stock of Dynamet. The purchase price will
be approximately $150,000,000 payable in 2.8 million shares of Registrant's
stock and $51,000,000 in cash plus assumption of Dynamet's debt of approxi-
mately $11,000,000. Dynamet is a privately held manufacturer of titanium bar,
wire and powder products which employs 320 people at its facilities in
Washington, McMurray and Bridgeville Pennsylvania; Clearwater Florida; and
Stanton California. The acquisition is scheduled to be completed in early
March and will be subject to a due diligence review and approvals under the
Hart-Scott-Rodino Anti-Trust Improvements Act. After the acquisition, P. C.
Rossin, Dynamet s founder and current chairman and CEO, will join the
Registrant's Board of Directors.
Item 7. Financial Statement and Exhibits.
(a) and (b) None.
(c) Exhibits:
Item 99. Press Release dated January 7, 1997
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: January 10, 1997 Carpenter Technology Corporation
(Registrant)
By: s/John R. Welty
_________________________________
John R. Welty
Vice President
General Counsel and Secretary
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EXHIBIT INDEX
Sequential
Exhibit Description Page Number
Item 99 Press Release dated January 7, 1997 5
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Katharine Marshall
(610) 208-3034/
Cathy Bower
IMMEDIATE RELEASE (610) 208-2639
CARPENTER ANNOUNCES MAJOR ACQUISITION,
SHORT-TERM BUSINESS OUTLOOK
Reading, PA (January 7, 1997) -- Carpenter Technology Corporation
(NYSE:CRS) announced today that it plans to acquire Dynamet Incorporated, a
privately-held manufacturer of titanium bar, wire and powder products, for
approximately $150 million in stock and cash, and assumption of Dynamet's
debt of approximately $11 million.
In a conference call this morning with major shareholders and analysts,
Carpenter Chairman, President and CEO Robert W. Cardy also moderated the
business outlook for Carpenter s fiscal year 1997 earnings (for the year
ending June 30, 1997), disclosing that earnings this year would be lower
than last fiscal year s record earnings. Cardy cited customer inventory
adjustments in some industries and the need to reduce Carpenter's own
inventories as the reasons for his current earnings projection.
Dynamet acquisition
Pending Hart-Scott-Rodino approval and final due diligence, Carpenter
expects to complete the acquisition of Dynamet, a Washington, Pa., company,
by early March 1997. It will be the largest acquisition in Carpenter's
108-year history.
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page2/Carpenter
Carpenter s vision is to be a growing, global specialty materials
company, and that has led to six acquisitions in the past few years to
extend the Corporation s product line, geographic reach and metals manu-
facturing capacity, Cardy says. With the acquisition of Dynamet, Carpenter
will establish a strategic position in the titanium bar and wire market
segment.
Titanium is predominantly used by the aerospace, medical and sports
products industries -- industries that Carpenter serves with its line of
stainless steels, high temperature alloys and engineered products. The
Dynamet acquisition particularly allows Carpenter to better satisfy the
aerospace industry s needs for a range of technically advanced materials
- -- these materials make possible continued innovation and higher performance
levels in new aircraft -- and to help realize Carpenter s goal of profitable
growth.
In fiscal year 1996 (ended June 30, 1996), the aerospace market was
Carpenter's largest, accounting for 15 percent of the company's sales.
Dynamet is owned by two families: the family of P.C. Rossin, 73,
Dynamet's founder and current chairman and CEO, and the family of
Peter N. Stephans, 54, the current president and chief operating officer.
After the acquisition, Rossin will join Carpenter s Board of Directors.
Stephans will serve as a consultant to the business.
Stephans plans to purchase Dynamet s forged products operation
(McMurray, Pa.) following closing for cash and assumption of debt, for a
total of approximately $4 million.
Robert J. Torcolini, currently vice president of Manufacturing
Operations for Carpenter's Steel Division, will become president of
Dynamet at closing.
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page 3/Carpenter
Carpenter will finance the $150 million purchase of Dynamet by issuing
2.8 million shares of Carpenter common stock and $51 million of cash.
Carpenter expects the purchase to have no effect on fiscal year 1997
earnings per share and to be accretive to earnings per share beginning in
fiscal year 1998 (ending June 30, 1998).
Carpenter's Business Outlook
The aerospace, power generation and oil and gas exploration markets
remain strong for Carpenter, Cardy said in the conference call today.
Major stainless bar and wire customers, however, have been adjusting their
inventories, reducing the need for Carpenter s products short-term, he said.
We're confident that long-term growth opportunities exist worldwide
in our product lines, Cardy said. We are continuing to implement our
previously announced capital expenditure program to increase manufacturing
capacity, improve quality and reduce operating costs, so that we can be
competitive in global markets.
Carpenter is a major producer of specialty metals and also manufactures
engineered products, such as ceramic cores for the casting industry and
injection-molded parts from ceramics and metal. The company employs more
than 4,600 people in North America, Europe and Asia, and, in fiscal year
1996, had sales of $865 million.
Dynamet employs 320 people at its plants in Clearwater, Fla.;
Washington, McMurray and Bridgeville, Pa.; and its warehouse in Stanton,
Calif. Estimated sales for 1996 are more than $100 million. The company
currently hot rolls and finishes titanium and nickel-based alloys in coils,
bar, shapes and wire; forges and machines components for the medical and
aerospace industries; and makes powder alloys for the aerospace and tooling
industries.
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