The British business will pay $200m, which works out at about £155m at current exchange rates.
Ellison Surface Technologies specialises in high velocity oxy-fuel coatings, or HVOF, a thermal spray coating technique used to create dense, well-bonded surface treatments.
‘Ellison’s business is one that we have long respected and is a perfect strategic fit for Bodycote's aerospace and specialist technologies' businesses’, said Bodycote chief executive Stephen Harris.
Bodycote will fund the deal from existing credit facilities and completion is anticipated sometime during the first quarter of 2020, on the assumption that various regulatory approvals are granted.
It is anticipated that the Ellison business will be immediately earnings enhancing to the enlarged Bodycote business.
Investors were positive towards the acquisition, bidding up the Bodycote share price by nearly 2% to 964p, valuing the company at nearly £1.85bn.