Ametek, the Berwyn-based, $5 billion (annual sales) devices and materials conglomerate, says it has agreed to sell its Robesonia, Berks County-based Reading Alloys business, to Kymera International, a North Carolina-based powdered-metals company, for $250 million.
The deal is scheduled to close before April.
Ametek had expanded the Reading Alloys plant in South Heidelberg Township since buying Reading in 2008 from a management-led group and its lenders.
Sales doubled during Ametek’s ownership, to $160 million last year, while employment fell since it bought the plant, to 120 from 165.
This is Ametek’s first factory sale in 25 years, reversing a growth trend. The company had spent more than $1.9 billion adding at least seven niche manufacturers since David Zapico became chief executive in 2016, including $925 million to acquire California-based Gatan, a maker of electron-microscope instruments and software, last fall.
Ametek’s stock, which has doubled in the last three years, topped $100 Tuesday.
The decision to find a buyer for Reading Alloys followed a “routine portfolio review," said spokesperson Kevin Coleman. Although profitable, "this business is more cyclical than we prefer,” and the cycle is hard to predict, he added. “We are very happy” with Ametek’s other businesses and have no other sales planned, though strategic reviews will continue.
Reading Alloys, founded in 1953, sells titanium powders, thermal-barrier coatings, and other metal and metal-alloy products to makers of war and civilian aircraft and medical and industrial products.
Customers include Morgantown-based PCC Metals Group (Timet), one of the world’s largest titanium processors, and ATI Industrial Automation, the New Holland robotics maker, said Coleman.
The plant property was flooded by neighboring Spring Creek when Hurricane Lee sent record-high waters through central Pennsylvania in 2011.
Ametek decided to sell Reading Alloys after reviewing whether it would likely help the owner meet its growth goals, which include boosting its earnings-per-share more than 10% a year.
Still, Reading Alloys remains “well positioned for continued strong growth,” said Ametek chief executive Zapico in a statement.
Kymera boss Barton White said Reading Alloy’s skilled workforce and specialized customers “fit in perfectly” with his company. Kymera stepped up its search for profitable businesses to buy since its purchase by the private equity firm Palladium Equity Partners LLC in 2018 from its previous owner, Platinum Equity Capital Partners.
New York-based Palladium’s other properties include Berwick, Pa.-based Wise Potato Chips, garlic purveyor Spice World, niche manufacturers, community banks, and insurers. Its managing director, Marcos Rodriguez, heads the Wharton School’s Latin America board.
Both Palladium’s and Platinum’s investors include the Pennsylvania Public School Employees’ Retirement System (PSERS), which has bet heavily on private equity. PSERS executives hope that private-company investors such as Platinum and Palladium, with their purchases, rejiggerings, and sales of companies such as Reading Alloys, will collectively prove more profitable than publicly traded U.S. stocks like Ametek itself.