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KPS Capital Partners to offload Waupaca Foundry to Hitachi Metals

Published : 2014-08-20

KPS Capital Partners announced that it signed a definitive agreement, to sell its portfolio company Waupaca Foundry Inc. to Hitachi Metals Ltd. for $1.3 billion in cash.

Waupaca is the largest iron foundry company in the world, which produces ductile and gray iron castings. Waupaca is North America's leading supplier of iron castings to the agriculture, automotive, commercial vehicle, industrial and construction markets.

KPS’ Managing Partner, David Shapiro stated that the success of their investment in Waupaca demonstrates the firm’s ability to see value where others do not, to purchase right and to make businesses better.  In 2012, they recognized the transformation of the North American iron foundry market and the importance of Waupaca to its customers and the end markets that it serves.
 
Waupaca’s Chief Executive Officer, Gary Gigante added that KPS recognized the potential of their business two years ago. Working in partnership with KPS, they invested significantly in their operations and people, which included an expansion of their production capacity and the launch of numerous improvement initiatives across all six of their foundries. According to Gigante, they are thrilled to join Hitachi Metals, which has the foundry experience, resources, access to capital and global reach which will enable Waupaca to achieve an even higher level of success.

Hitachi Metals, which was established in 1910, traces its origins to the Tobata foundry, and had revenue of 808 billion yen ($7.9 billion) in the year ended March. Hitachi Metals is also the world’s largest producer of magnets derived from rare earths.

For KPS, the deal is a home run which acquired Waupaca just two years ago from German industrial conglomerate ThyssenKrupp AG. According to a source who is familiar with the matter, KPS stood to make about five times its $226 million investment in Waupaca.

The deal which is expected to be completed by the fourth quarter is subject to customary regulatory conditions.

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