Mark Semer/Andrea Calise 212.521.4800
KPS CAPITAL PARTNERS PORTFOLIO COMPANY, HHI GROUP
COMPLETES SEVENTH SUCCESSFUL RECAPITALIZATION SINCE ITS CREATION
(March 23, 2012) -- KPS Capital Partners, LP ("KPS") announced
today that its portfolio company, HHI Group Holdings, LLC (“HHI”),
completed its seventh successful recapitalization since its creation. The
proceeds of the recapitalization – funded by a combination of a $50
million upsizing of the Company’s term loan, cash on hand and the
Company’s asset based revolving credit facility – were used to fund a $70
million cash distribution to stockholders.
Following the seventh
recapitalization, HHI remains conservatively capitalized and has 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 outstanding common stock.
HHI has distributed over $418.8
million of cash to its stockholders since its creation in 2006.
Financing for the transaction
was provided by a syndicate of banks and institutional investors with
Bank of America Merrill Lynch and Goldman Sachs acting as Lead Arrangers
on the upsizing of the Company’s term loan.
Jenner & Block LLP served as
legal counsel to HHI with respect to the transaction.
HHI Group Holdings, LLC
HHI Group Holdings, LLC
("HHI"), through its Jernberg
Holdings, LLC, Impact Forge Group, LLC, HHI FormTech,
LLC, Kyklos Bearing International, LLC (“KBI”)
and Cloyes Gear and Products, Inc.
subsidiaries, 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. With over 3,000 employees,
HHI is headquartered in Royal Oak, Michigan and operates 15 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 $2.8 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.