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KPS CAPITAL
PARTNERS TO SELL WAUPACA FOUNDRY
TO HITACHI METALS FOR $1.3
BILLION IN CASH
New York, NY (August 19,
2014) -- KPS Capital Partners, LP (“KPS”) announced today that it signed
a definitive agreement, through an affiliate, to sell its portfolio
company Waupaca Foundry, Inc. (“Waupaca” or the “Company”) to Hitachi
Metals, Ltd. (“Hitachi Metals”, TSE: 5486) for $1.3 billion in cash.
Waupaca is the
largest iron foundry company in the world, producing gray and ductile
iron castings using state-of-the-art technology. The Company is North America’s leading supplier of iron castings to the
automotive, commercial vehicle, agriculture, construction and industrial
markets.
David Shapiro,
a Managing Partner of KPS, stated, “The success of our investment in
Waupaca demonstrates KPS’ ability to see
value where others do not, to buy right and to make businesses
better. In 2012, we recognized the
transformation of the North American iron foundry market and the
unrivaled importance of Waupaca to its customers and the end markets that
it serves. The sale of Waupaca to
Hitachi Metals, a leading multinational corporation, is a great outcome for
our investors, Waupaca, its management, employees and customers.
“KPS worked
with management to improve every aspect of Waupaca’s
business, resulting in profitability increasing by more than 40% in just
over two years. The investment
return generated for our investors in the Waupaca transaction is further
validation of the KPS investment strategy, which we have successfully
executed over many years and across numerous economic cycles. We are very proud to have had the
opportunity to partner with Gary Gigante, his management team and all the
dedicated employees of Waupaca.
The material value created for our investors since 2012 is the
result of their collective effort, for which we are very grateful. We are confident that Waupaca will
continue to grow and prosper in the future as part of Hitachi Metals,” Mr.
Shapiro concluded.
Gary Gigante,
Chief Executive Officer of Waupaca, added, “KPS recognized the potential
of our business two years ago.
Working in partnership with KPS, we invested significantly in our
operations and people, which included an expansion of our production
capacity and launching numerous continuous improvement initiatives across
all six of our foundries. We are
very grateful to KPS for its leadership and its commitment to improving
and growing our business. We are
thrilled to join Hitachi Metals, which has the resources, foundry
experience, access to capital and global reach that will enable Waupaca
to achieve an even higher level of success.”
Completion of
the transaction, which is expected during the fourth quarter, is subject
to customary closing conditions.
Paul, Weiss, Rifkind, Wharton & Garrison LLP and Morgan
Stanley & Co. LLC served as legal counsel and financial advisor,
respectively, to KPS and Waupaca with respect to the transaction.
About Waupaca Foundry, Inc.
Waupaca
Foundry, Inc., the largest iron foundry company in the world, produces
ductile iron and gray iron castings using state-of-the-art
technology. Waupaca is North
America’s leading supplier of iron castings to the
automotive, commercial vehicle, agriculture, construction, and industrial
markets. Headquartered in Waupaca,
Wisconsin, the iron metal caster operates six manufacturing facilities,
located in Waupaca, Wisconsin (3 individual sites), Marinette, Wisconsin,
Tell City, Indiana, and Etowah, Tennessee. Waupaca employs approximately 3,900
people. For more information, visit www.waupacafoundry.com.
About KPS Capital Partners, LP
KPS is the
manager of the KPS Special Situations Funds, a family of investment funds
with over $6.1 billion of assets under management. KPS seeks to realize significant
capital appreciation by making controlling equity investments in
companies across a diverse range of manufacturing industries experiencing
a period of transition or challenged by the need to effect immediate and
significant change. KPS creates
value for its investors by seeing value where others do not, buying right
and making businesses better. The
KPS investment strategy is based primarily upon partnering with
world-class management teams to effect material and sustainable
improvements in the operations of its businesses. Thereafter, KPS focuses on growing its
businesses, both organically and through strategic acquisitions. KPS portfolio companies have aggregate
annual revenues of approximately $8.1 billion, operate 109 manufacturing
facilities in 26 countries, and employ over 51,000 associates, directly
and through joint ventures worldwide.
The KPS investment strategy and portfolio companies are described
in detail at www.kpsfund.com.
