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FOR
IMMEDIATE RELEASE
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Business Inquiries:
KPS 212.338.5100
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Media
Relations:
Mark Semer/Andrea Calise 212.521.4800
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KPS PORTFOLIO COMPANY, HHI GROUP HOLDINGS, TO FORM
CHINESE
JOINT VENTURE WITH 8+1
New Company Will Manufacture Wheel-End Bearing and
Transmission Components for Chinese and Asian Markets
New
York, NY
(May 2, 2011) – HHI Group Holdings, LLC ("HHI"), the leading
manufacturer of forged parts for the North American automotive industry,
announced today an agreement with Zhejiang 8+1 Precision Machinery Co. (“8+1”)
and C&U Americas, LLC (“C&U”) to form Mapleland
Precision Forge Co. Ltd. (“Mapleland”), a new
joint venture company that will
manufacture highly-engineered wheel-end bearing and transmission
components for customers in China and Greater Asia. HHI will own
25% of Mapleland.
HHI’s contribution to the joint
venture will consist of three state-of-the-art Hatebur
AMP70 high-speed hot forging machines, commonly recognized as the most
efficient and technologically advanced forging equipment. Once
these world-class machines, together with HHI’s proprietary technical
expertise and process know-how, are transferred to Mapleland,
the company will possess a significant competitive advantage in the
Chinese automotive forging market.
HHI retains sufficient capacity to supply forgings to the North
America automotive market even at peak historical light vehicle
production levels.
The formation of Mapleland will enable HHI to capitalize on
significant growth opportunities presented by the Chinese and Asian
automotive markets and to supply 8+1’s broad customer base in China and will
create the opportunity for HHI to provide further support to its
customers which have manufacturing facilities located in China. It
is anticipated that Mapleland will open a new
facility in Huzhou City, Zhejiang Province,
near 8+1’s existing forging and machining park. The facility is scheduled
to begin production by the fourth quarter of 2012.
George Thanopoulos, Chief
Executive Officer of HHI, and Michael Crosby, Chief Executive Officer of C&U,
jointly commented, “We are very excited to create this partnership
between our companies. Mapleland will begin operations with enormous
manufacturing capacity to serve the Chinese market with industry leading
equipment and world--class forging expertise. This initial phase of
cooperation focused initially on high-speed hot forgings will pave the
way for potential future collaboration in other product areas such as
wheel bearings.”
HHI was solicited by numerous
leading forging and bearing manufacturers in China with respect to the
establishment of a joint venture, but selected 8+1 because of its
extensive technical forging and machining expertise, knowledge of the
local markets, and substantial customer base including many bearing
manufacturers.
Formation of the joint venture is
subject to Chinese governmental approval.
About
HHI Group Holdings, LLC
HHI is the largest independent
manufacturer of highly-engineered symmetrical and asymmetrical forged
parts for various power train and wheel-end applications, a leading
manufacturer of wheel bearings, and one of the few manufacturers of
engine timing drive systems for the North American automotive industry. The company operates through its Jernberg Holdings, LLC, Impact Forge Group, LLC, HHI FormTech, LLC, Kyklos
Bearing International, LLC (“KBI”) and Cloyes
Gear and Products, Inc. subsidiaries.
With over 2,700 employees, HHI is headquartered in Royal Oak,
Michigan and operates 14 manufacturing facilities located in Arkansas,
Illinois, Indiana, Michigan and Ohio. For more information, please visit www.hhigroupholdings.com.
About
KPS Capital Partners, LP
KPS Capital Partners, LP is the
manager of the KPS Special Situations Funds, a family of private equity
funds with over $2.6 billion of committed capital focused on constructive
investing in restructurings, turnarounds and other special situations.
KPS has created new companies to purchase operating assets out of
bankruptcy; established stand-alone entities to operate divested assets;
and recapitalized highly leveraged public and private companies. The KPS
investment strategy targets companies with strong franchises that are
experiencing operating and financial problems. KPS invests its capital
concurrently with a turnaround plan predicated on cost reduction, capital
investment and capital availability. Typically, the KPS turnaround plan is
accompanied by a financial restructuring of the company's liabilities.
The KPS investment strategy and portfolio companies are described in
detail at the firm's website: www.kpsfund.com.
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