Three Firms Counsel Alcoa’s Acquisition of Aerospace Unit

Alcoa Inc. has said it will acquire jet engine component producer Firth Rixson in a $2.85 billion deal expected to enhance the company’s aerospace production.

The terms of the transaction call for the New York-based Alcoa to purchase Firth Rixson from its private equity owner, Oak Hill Capital Partners, for $2.35 billion in cash and $500 million in stock. An additional $150 million could be paid out by 2020 if Firth Rixson achieves certain performance targets.

Alcoa sought legal counsel from Wachtell, Lipton, Rosen & Katz and Crowell & Moring, while Firth Rixson turned to Paul, Weiss, Rifkind, Wharton & Garrison.

Wachtell’s New York-based team was led by corporate partners Karessa Cain and Martin Lipton, and included executive compensation and benefits partner David Kahan, litigation partner Martin Arms, restructuring and finance partner Gregory Pessin, and tax partners Deborah Paul and T. Eiko Stange. Participating associates include Erica Bonnett, executive and compensation benefits; Tijana J. Dvornic and Michael Sabbah, tax; Sara Lewis, corporate, and Austin Witt and Peter Zuckerman, restructuring and finance.

Crowell provided antitrust and competition advice for Alcoa, with a team headed by antitrust Brussels-based partner Werner Berg and Washington, D.C.-based antitrust partner Shawn Johnson.

Weil, Gotshal & Manges counseled Alcoa’s financial adviser Morgan Stanley, with a New York-based team led by finance partner Morgan Bale and capital markets partner Matthew Bloch.

Also involved from Weil were finance partner Danek Freeman, M&A partner Raymond Gietz, and tax partner William Horton, in addition to Washington, DC environmental partner Annemargaret Connolly and counsel Matthew Morton. Also included were financial associates Brandon Cherry, Heather Viets, Justin C. Lee, Sarah Davis, Rachel Trudeau, capital markets associates Michael Esposito and Christine Paik, and M&A associate Jamie Lurie, all based in New York.

For its part, Firth Rixson turned to a New York-based Paul Weiss team made up of partners, Robert Fleder, employee benefits; Daniel Beller, litigation, David Sicular, tax; Robert Schumer, corporate, as well as London corporate partner David Lakhdhir. Corporate associates Brian Lavin and Caitlin O’Brien also worked on the deal.

In light of its bid to expand its aerospace sector, Alcoa’s decision to team up with U.K.-based Firth Rixson was no accident. Firth Rixson earned three-quarters of its $1 billion in revenue last year from aerospace products, with the majority of its revenue coming from seamless jet engine rings.

By acquiring Firth Rixson, Alcoa said it expects to grow its aerospace sector by 20 percent annually through expanded product offerings, in addition to capitalizing on an expected compounded annual growth rate of 7 percent in commercial jets for the next five years.