The Carlyle Group announces cash offer for Firth Rixson plc

London - Global private equity firm, The Carlyle Group, today announced that it has reached agreement on the terms of a recommended cash offer for Firth Rixson plc, a UK-based specialist engineering group. The offer will be made through a special purpose vehicle, Forgings International Limited.

The offer to shareholders will be of 25.75p per ordinary share. This represents a premium of approximately 119% on the last dealing day prior to the announcement that Firth Rixson was in discussions that might lead to an offer for the company. The offer values Firth Rixson's ordinary share capital at approximately £50 million. The directors of Firth Rixson and a number of institutional shareholders, who between them hold 49.1% of Firth Rixson's ordinary shares, have indicated their intent to accept the offer. The transaction values Firth Rixson at an enterprise value of approximately £106 million. Bank of Scotland is providing debt facilities in support of the offer.

Upon completing the transaction Carlyle intends to merge an existing US portfolio company, Forged Metals Inc (FMI), with Firth Rixson under the new Forgings International structure. The combination of the two businesses will bring production efficiencies and enable the enlarged group to better meet the needs of customers. David Squier, executive chairman of Forgings International, will also act as CEO of the group while David Hall, current CEO of Firth Rixson will resign following the transaction. Mr. Squier has spent 28 years in the aerospace and IGT forgings and casting business, most notably at Howmet, which was a Carlyle portfolio company between 1995 and 1997.

Sir John Parker, chairman of Firth Rixson said, "I believe that this offer provides Firth Rixson Shareholders with an attractive opportunity to realise their investment at a significant premium particularly when judged against the market risks that the Firth Rixson Group faces over the short to medium term."

Robert Easton, a director of The Carlyle Group, said, "Firth Rixson has good niche positions in attractive markets, based on its unique technology and asset base. The group has excellent organic growth potential and good scope for operational improvement. We also see benefits in combining Firth Rixson with FMI. The merged entity would provide a platform with sufficient critical mass to build a leading, fully integrated supplier of specialist forgings."

A formal offer document will be posted to shareholders within 28 days. The first closing date for responses will be 21 days after the formal offer document is issued.