Citation And Grede Announce Completion of Business Combination
Grede Foundries, Inc. Assets to be Combined with Citation Corp. to form Grede Holdings LLC Citation CEO Doug Grimm to Lead “New” Grede
Novi, Mich., February 5, 2010 – Citation Corp. and Grede LLC today announced the completion of a series of transactions resulting in the combination of certain assets of Milwaukee-based Grede Foundries, Inc. with Citation Corp. to form a new company named Grede Holdings LLC.
The transactions include the closing of the purchase of substantially all the assets of Grede Foundries by Grede LLC, an entity controlled by a private investment fund managed by Wayzata Investment Partners LLC (“Wayzata”), pursuant to a 363 bankruptcy auction process. The transactions were also facilitated by additional equity investment from Wayzata and Citation’s largest shareholder, GSC Group. The new company will be controlled by Wayzata and will be led by Doug Grimm, who will be the chairman, president and Chief Executive Officer (CEO) and is the former CEO of Citation. The new Grede will be headquartered in Novi, Mich.
“The combination of Citation and Grede creates, what we believe is, the most diversified foundry company in North America with one of the strongest balance sheets in the industry,” said Grimm. “We expect revenue to reach $600 million in 2010 through our combined business in the automotive, industrial and heavy truck markets. The significant equity investment from Wayzata and GSC has reduced total funded debt of the two companies by 80 percent, or $110 million. This gives us a best-in-class financial profile, allows us to invest appropriately and weather economic cyclicality moving forward.”
The new Grede has 2,700 employees, 14 foundries and two machining facilities with nearly 600,000 tons of iron casting capacity. The company will have an expanded manufacturing portfolio with capability to produce and machine ductile, gray, high silicon moly and lost foam iron cast component parts and assemblies ranging from 1 lb. to 2,000 lbs.
“The objective in combining these two great companies is to harness the best of both companies’ people, assets and technologies to provide an unparalleled array of products and capabilities to the iron castings market,” said Grimm.
The new Grede organization is in place and will continue to evolve through the integration process. Employees at the former Grede headquarters in Milwaukee will likely relocate to the Novi, Mich. and Menomonee Falls, Wis., facilities in 2010.
The path to combine the two companies was cleared December 23, 2009 when the United States Bankruptcy Court for the Western District of Wisconsin approved the sale of substantially all of the assets of Grede Foundries, Inc. to Grede LLC. The assets included in the sale were six foundries and Grede’s Milwaukee, Wis., headquarters. The six foundries are Liberty Foundry (Wauwatosa, Wis.), Iron Mountain Foundry (Kingsford, Mich.), St. Cloud Foundry.
(St. Cloud, Minn.), Reedsburg Foundry (Reedsburg, Wis.), New Castle Foundry (New Castle, Ind.) and Wichita Foundry (Wichita, Kan.). Through the combination with Citation, the new Grede will include an additional eight foundries located in Berlin and Browntown, Wis., Brewton, Bessemer, Marion, Columbiana and Selma, Ala., Biscoe, N.C., and two machining facilities in Menomonee Falls and Oconomowoc, Wis.
About Grede Holdings LLC
Grede Holdings LLC was formed in 2010 through the combination of the assets of the former Grede Foundries, Inc. with Citation Corporation. The Grede Holdings LLC legacy dates to 1920, when William J. Grede founded Grede Foundries, Inc. with an iron foundry in Wauwatosa, Wis. Privately-held with headquarters in Novi, Mich., the company specializes in high quality ductile, gray and specialty iron castings including lost foam and high silicon moly applications. Grede Holdings LLC operates 14 foundries and two machining operations in the United States serving the Transportation and Industrial markets globally.