Ladish in deal to acquire forger Chen-Tech

CUDAHY, Wis.—Ladish Co. Inc., which produces metal components and supplies forgings, castings and other components for the jet engine, aerospace and industrial markets, said Wednesday it will acquire Chen-Tech Industries Inc., a forger of jet engine components.

Terms of the purchase of privately-held Chen-Tech were not disclosed, but Ladish said the value is about $59 million, which will be paid in cash and Ladish stock.

Irvine, Calif.-based Chen-Tech, which forges nickel-based and titanium components for smaller jet engines serving single aisle, regional and business aircraft, complements Ladish, which forges larger engine components, said Kerry L. Woody, president and chief executive of Ladish.

"By combining Chen-Tech's strengths with Ladish's material technology and global market position we have laid a foundation to capitalize on long-term growth opportunities," he said. "The merger provides Ladish with a broadened product offering and increased market share on mutual aerospace programs."

Ladish anticipates the deal -- which is expected to close next quarter -- will boost its earnings in 2008. Chen-Tech has projected 2008 sales of about $50 million.

A message seeking comment was left with Chen-Tech.

Aerospace analyst Richard Aboulafia of the Teal Group said aerospace businesses benefit from consolidation.

"You can negotiate better prices for raw materials, which are prohibitively expensive. You get a better bargaining position relative to your customers and you have greater financial strength to invest in new tooling, new products," he said.

Shares of Ladish rose 80 cents, or 3.4 percent, to finish at $24.59.