NEW YORK, November 14, 2006 - Castle Harlan, Inc., the New York private equity firm, announced today that an investment fund it manages has agreed to acquire AmeriCast Technologies, Inc., a North American leader in the design and manufacture of large, complex steel castings. The transaction was valued at $110 million. The seller is KPS Special Situations Funds, also a New York private equity firm.
AmeriCast, based in Atchison, Kansas, produces highly engineered steel castings, with most of its volume from products over 10,000 pounds and the largest weighing 65,000 pounds. The company has a leading market share in the U.S market for large steel castings, and its customers include Caterpillar, Electro-Motive Diesel, and General Electric. End products for AmeriCast's castings include large mining trucks and locomotives. The company has five business units in North America.
Howard D. Morgan, a Castle Harlan senior managing director who led the firm's acquisition team, said the company has an experienced management team and strong growth prospects.
"AmeriCast has a proud heritage that dates back to 1872," Morgan said. "The company has been increasing its capacity and utilization, and its backlog of orders has been steadily expanding. Annual net sales are more than $200 million and continuing to grow," Morgan said.
"The business will be very well capitalized," Morgan said, "and has cash and an untapped revolving loan to invest prudently to meet customer needs."
Tom Armstrong, President and CEO of AmeriCast, said, "AmeriCast's management team is very excited about Castle Harlan's purchase of our company. This transition has always been part of the long-range plan. We couldn't be more pleased to partner with Castle Harlan, a firm with an outstanding reputation and rich history. Their investment, coupled with their and Bradken's experience in our industry, will help us reach the next stage of our company's continued growth"
AmeriCast's management will hold an equity stake in the company, as will Bradken, a publicly traded Australian company. Bradken is the leading provider of cast steel products to the mining and freight rail sectors in Australia, and is a former portfolio company of CHAMP Private Equity, a Castle Harlan affiliate in Australia. Brian Hodges, CEO of Bradken, will be a member of AmeriCast's board of directors.
"AmeriCast's Atchison foundry in Kansas holds a key strategic position in the large steel castings market, producing products for major blue chip customers," Hodges said. "The business possesses strong, unique technical skills, and we think it will be an excellent investment with good visibility and long term potential."
Michael Psaros, managing principal of KPS Special Situations Funds, said, "AmeriCast is a terrific company. When we created AmeriCast in December 2003, we saw the value in the assets, and the company is now on a solid growth trajectory. We are pleased to turn over the reins to Castle Harlan and its team."
AmeriCast will be acquired by Castle Harlan Partners IV, L.P., a private equity investment fund organized and managed by Castle Harlan. The fund closed in August 2003 with capital commitments of $1.2 billion. It is now approximately 66 percent invested.
Castle Harlan, founded in 1987, invests in controlling interests in the buyout and development of middle-market companies in North America and Europe. Its team of 19 investment professionals has completed 47 acquisitions since its inception with a total value in excess of $8 billion. The firm traces its roots to the start of the institutionalized private-equity business in the late 1960s.
Castle Harlan's current portfolio companies, which employ more than 53,000 people, include the Polypipe Group, a leading supplier of plastic pipe systems in the United Kingdom and Ireland; Ames True Temper, a leading manufacturer of lawn and garden tools and accessories; and Perkins & Marie Callender's, Inc., which operates and franchises 618 family restaurants in the United States and Canada.
Castle Harlan Australian Mezzanine Partners Pty Limited ("CHAMP Private Equity") was formed in 2000 and is Australasia's oldest and largest independent manager of private equity funds. It is adviser to the CHAMP I and CHAMP II funds, which have funds of approximately A$1.5 billion for investment in buyouts in Australasia.