Mark Semer/Andrea Calise 212.521.4800
CAPITAL PARTNERS PORTFOLIO COMPANY, HHI GROUP HOLDINGS,
COMPLETES THIRD SUCCESSFUL RECAPITALIZATION IN LAST YEAR
(March 21, 2011) -- KPS Capital Partners, LP ("KPS") announced
today that its portfolio company, HHI Group Holdings, LLC (“HHI” or the
“Company”), has completed a third successful recapitalization in the last
twelve months. HHI raised $425 million of new financing, including a $100
million asset based revolving credit facility and a $325 million term
loan. The proceeds of the recapitalization were used to refinance
outstanding debt, to fund a $100 million cash distribution to
stockholders and to fund the Company’s continued growth.
Following the recapitalization,
HHI remains conservatively capitalized with the continued support of KPS,
its majority stockholder. KPS and
minority stockholders, including MC Capital Inc. (a subsidiary of
Mitsubishi Corp.) and HHI management, continue to own 100% of HHI’s
HHI has completed three
recapitalizations in less than one year.
HHI completed a $300 million recapitalization on March 31, 2010
and a $30 million upsizing of its term loan on October 1, 2010. The
combined proceeds of the three recapitalizations, as well as the
Company’s strong cash flow, resulted in more than $300 million in cash
distributions to stockholders.
The financing was provided by a
syndicate of banks and institutional investors with Bank of America
Merrill Lynch acting as Sole Lead Arranger on the $100 million asset
based revolving credit facility, and Bank of America Merrill Lynch,
Goldman Sachs and Credit Suisse acting as Joint Lead Arrangers on the
$325 million term loan.
Jenner & Block LLP served as
legal counsel to HHI with respect to the recapitalization.
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
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.