Kennametal sells Goshen subsidiary for $19 million

PITTSBURGH - Kennametal Inc. (NYSE: KMT), currently trading at $21.94 with a market capitalization of $1.68 billion, has finalized the sale of its Goshen, Indiana subsidiary, Kennametal Stellite, L.P., to a private equity firm based in Chicago, the company announced today. The transaction, which resulted in a pre-tax loss that the company deemed immaterial, was valued at $19 million upon closing, with additional post-closing adjustments and an EBITDA-based earn-out possible over a three-year term. According to InvestingPro analysis, the company maintains strong financial health with liquid assets exceeding short-term obligations.

Kennametal Stellite, operating within the Infrastructure segment, focuses on surface coating and welding product markets. This subsidiary accounted for less than 2% of Kennametal’s total sales and was not a significant contributor to the company’s profitability.

President & CEO Sanjay Chowbey described the sale as a strategic move to enhance Kennametal’s sales mix, reduce exposure to material cost volatility, and concentrate resources on areas that align with the company’s long-term strategic priorities. The proceeds from the sale are intended for general corporate purposes.

Kennametal, with a history spanning over 85 years, is recognized as a leader in industrial technology, offering material science, tooling, and wear-resistant solutions. Serving a diverse range of sectors including aerospace, defense, energy, and transportation, the company employs approximately 8,400 people and operates in nearly 100 countries. In fiscal 2024, Kennametal reported revenues of $2 billion, maintaining a healthy gross profit margin of 31.3% and an impressive 55-year track record of consecutive dividend payments, currently yielding 3.67%.

The company’s forward-looking statements indicate expectations for future growth and financial performance, though they also acknowledge that such projections are subject to inherent risks and uncertainties. Factors that could influence actual results include global economic conditions, regulatory changes, and market acceptance of products.

This sale is part of Kennametal’s ongoing efforts to optimize its portfolio and focus on key strategic initiatives aimed at delivering greater value to stakeholders. The financial details of the sale are based on a press release statement from Kennametal Inc. InvestingPro analysis suggests the company is slightly undervalued at current levels, with four analysts recently revising their earnings expectations upward. For deeper insights into Kennametal’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

In other recent news, Kennametal Inc. reported its fiscal third-quarter results for 2025, showcasing a notable performance by exceeding earnings expectations. The company achieved an adjusted earnings per share (EPS) of $0.47, surpassing the forecasted $0.25 by 88%. However, revenue slightly missed expectations, coming in at $486.39 million compared to the anticipated $488.54 million. Despite the revenue miss, Kennametal’s performance was bolstered by significant cost savings, including $6 million from restructuring efforts and a $10 million advanced manufacturing tax credit. Analysts from Morgan Stanley and UBS have taken an interest in Kennametal’s strategic initiatives and tariff mitigation efforts, with the company expressing confidence in fully offsetting the direct impact of tariffs. For the fiscal year 2025, Kennametal projects sales between $1.970 billion and $1.990 billion, with adjusted EPS guidance ranging from $1.30 to $1.45. The company anticipates growth in aerospace and defense, while expecting declines in other sectors such as transportation and energy.

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