Publicly traded American Axle & Manufacturing has agreed to sell its US iron casting operations (Grede) to Gamut Capital for $245 million, consisting of $185 million in cash and $60 million in deferred payment obligations.
Through its 10 foundries, Grede manufactures, assembles and supplies ductile, gray, and specialty iron castings and machined components. Grede’s products include chassis, suspension and drivetrain automotive components, engine and chassis parts for heavy-duty trucks, large axle housings, and other drivetrain components for the heavy equipment and agriculture markets. In 2018, Grede had $781 million in revenues.
Grede is a former portfolio company of American Securities (acquired in May 2014 from Wayzata Investment Partners). In August 2014, American Securities merged Grede with two of its other portfolio companies, HHI and Metaldyne, to form Metaldyne Performance Group (MPG) which went public in December 2014. MPG was acquired by American Axle in April 2017.
“Grede is a market-leading supplier of high-performance, mission-critical castings with national scale, a blue-chip customer base and significant opportunities for growth,” said Jordan Zaken, a founding partner of Gamut. “We are excited to partner with Grede and its dedicated employee base in its next chapter as an independent company focused on operational excellence and best-in-class delivery for its customers.”
Gamut Capital invests from $50 million to $150 million in leveraged buyouts, corporate carveouts, strategic partnerships, and distressed-for-control situations. Industries of interest include agriculture, chemicals, telecom, industrials, mining, power, distribution, technology, energy, and transportation. The firm closed its debut fund, Gamut Investment Fund I LP, in January 2017 with $1 billion of capital commitments. Gamut Capital was founded in 2015 by Stan Parker and Jordan Zaken – both former senior partners at Apollo Global Management – and is based in New York (www.gamutcapital.com).
Detroit-based American Axle & Manufacturing (NYSE: XL) designs and manufactures driveline, metal forming, powertrain, and casting products. The company has nearly 90 facilities in 17 countries including the United States, Mexico, South America, China, other Asian countries, and Europe. The company, led by CEO David Dauch, was founded in 1994 and has annual revenues of more than $7.2 billion (www.aam.com).
This transaction is expected to close in the fourth quarter of 2019.
© 2019 Private Equity Professional | September 23, 2019
