American Securities has acquired HHI Group Holdings, a manufacturer of forged components for automotive customers and a portfolio company of KPS Capital Partners.
HHI Group Holdings is a manufacturer of symmetrical and asymmetrical forged parts for various power train and wheel-end applications, a manufacturer of wheel bearings, and a manufacturer of engine timing drive systems for the North American automotive industry. The company is headquartered in Royal Oak, MI and has over 3,000 employees at its 15 manufacturing facilities located in Arkansas, Illinois, Indiana, Michigan and Ohio (www.hhigroupholdings.com).
“HHI is an excellent fit in our portfolio of companies as a leader in its market of highly specialized products,” said Kevin Penn, Managing Director at American Securities. “We look forward to working with a highly talented management team as we continue to strengthen and grow this business in the automotive-component market.”
HHI was created by KPS in September 2005 in partnership with George Thanopoulos, Chief Executive Officer, through a series of acquisitions including Jernberg Forge, Impact Forge, FormTech Industries and Cloyes Gear and Products, among others. In addition, HHI, through its subsidiary, Kyklos Bearing International, acquired Delphi Corporation’s North American wheel bearings business.
“We are proud of the significant organic growth of the HHI business and are grateful to KPS for providing our team with leadership, expertise, capital and other resources as we built this platform,” said Mr. Thanopoulos. “We look forward to partnering with American Securities to continue our commitment to quality, innovation, customer service and manufacturing excellence.”
American Securities generally invests in businesses with $500 million to $2 billion of revenues and $50 million to $200 million of EBITDA. Investments are undertaken with conservative financial structures that typically include only equity and senior debt. The firm aims to invest $150 million to $500 million of equity capital in each portfolio company. Sectors of interest include industrial manufacturing, specialty chemicals, aerospace and defense, energy, business services, healthcare, media, restaurants, and consumer products. American Securities has offices in New York and Shanghai (www.american-securities.com).
KPS Capital Partners is the manager of the KPS Special Situations Funds, a group of private equity funds with over $2.7 billion of committed capital focused on 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. The firm is located in New York, NY (www.kpsfund.com).
“HHI is a validation of the KPS investment strategy, and we take immense pride in the company’s accomplishments. HHI is the result of five unique acquisitions and subsequent turnarounds of companies that were formerly operating in bankruptcy or in distress,” said Michael Psaros, a Managing Partner of KPS. “Under our ownership, these assets were transformed into a diversified, value-added, highly specialized company in the automotive industry. We congratulate and thank George Thanopoulos and his management team for their strategic vision and brilliant tactical execution. We also thank the United Auto Workers, the United Steelworkers and Workers United for their critical contributions toward the success of HHI.”
Goldman, Sachs & Co. acted as financial advisor to KPS and HHI on this transaction.
© 2012 PEPD • Private Equity’s Leading News Magazine • 10-9-12
