Chennai-based Sanmar Group, which has diversified interests in chemicals, engineering and shipping, has acquired Matrix Metals LLC, a portfolio company of Jefferies Capital Partners, for an undisclosed sum. Matrix Metals has been sourcing castings from Sanmar group for last several years and has three plants – two in the US and one in Mexico.
The acquisition has been funded by a bridge loan facility provided by Bank of India New York branch. State Bank of India’s New York branch will be the long-term fund provider, said a spokesperson of the group here on Tuesday.
Faced with contracting foundry capacity in North America and growing demand for products featuring high quality castings, customers have for some time encouraged Matrix and Sanmar to expand and better integrate their activities.
Matrix Metals closed the last financial year with sales of $157 million, up 10% over 2006 sales. It employs nearly 1,300 people in its three plants. This is the second major foundry acquisition in the overseas Markets by Sanmar group. During early 2007, Sanmar group acquired German-based Eisenwerk Erla GmbH, a high-end alloy castings producer for Rs 150 crore.
Matrix Metals operates one of the largest speciality steel casting businesses in North America, with foundries in Keokuk, Iowa, Richmond, Texas and San Juan del Rio, Mexico, the spokesperson added.
“We are convinced that Matrix joining with Sanmar will create one of the leading specialty steel casting groups in the world,” said Roger Courtney, CEO of Matrix and president of the Keokuk foundry. “Combining Sanmar’s expanding foundry capacity with ours will enable us to meet almost any North American customer’s casting requirement and create new business opportunities across the combined Companies,” he added.
B Natraj, director, Sanmar Group, who is relocating to the US and will serve as Matrix’s executive vice-chairman, said, “Our first priority will be to reinforce Matrix’s sales and marketing efforts in the US and underscore our ability to serve a broader range of global customer casting requirements.”