FOR IMMEDIATE RELEASE
Mark Semer/Joe Kuo 212.521.4800
KPS CAPITAL PARTNERS PORTFOLIO COMPANY, CLOYES GEAR AND PRODUCTS, INC., SELLS CLOYES EUROPE GMBH TO SUMITOMO ELECTRIC INDUSTRIES, LTD.
New York, NY (September 27, 2007) -- KPS Capital Partners, LP (“KPS”) today announced that its portfolio company, Cloyes Gear and Products, Inc., has sold its European business, Cloyes Europe GmbH, to Sumitomo Electric Industries, Ltd. and its wholly owned subsidiary, Sumitomo Electric Sintered Alloy, Ltd. Cloyes Europe is located in Oberseifersdorf, Zittau, Saxony, Germany and produces powdered metal components for the automotive industry in Europe.
This transaction represents the fourth successful sale of a KPS portfolio company or a business owned by a portfolio company to a Japanese strategic acquirer. In November 2005, Genesis Worldwide II, Inc., a former KPS portfolio company, sold its GFG subsidiary to Mitsubishi Hitachi Heavy Metals Machinery (Japan). In May 2006, KPS sold Ashcroft, Inc. to Nagano Keiko Co., Ltd. (Japan). In October 2006, Hephaestus Holdings, Inc., a current KPS portfolio company, sold a minority equity ownership interest to Mitsubishi Corporation (Japan).
This transaction is also the second successful turnaround and sale of a German business by KPS within the past year. In November 2006, KPS sold its portfolio company, Ebro Electronics GmbH, Inc., to Nova Analytics Corporation.
About Cloyes Gear and Products, Inc.
Cloyes Gear and Products, Inc. is a leading supplier of timing systems and components for automotive engines and enjoys a dominant market position in the North American automotive aftermarket under the Cloyes® and Dynagear® brand names. Cloyes is one of only four global OE suppliers that provides customers with the design, engineering, manufacturing and supply chain management for the timing system in engines. Cloyes is also one of the few global suppliers that has demonstrated the expertise required to manufacture components used in growing markets for variable valve timing technology. Cloyes operates four manufacturing facilities in the United States and three distribution/system assembly facilities in North America. www.cloyes.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 $1.8 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. KPS’s investment strategy and portfolio companies are described in detail at the firm's website: www.kpsfund.com.