Waupaca Foundry name will return; management to remain under KPS Capital ownership
ThyssenKrupp AG is selling its gray and ductile iron foundry group to KPS Capital Partners, LP, a private equity group, for an unreported price. TK Waupaca is often described as the world’s largest iron foundry, and operates six plants in Wisconsin, Indiana, and Tennessee, with approximately 3,500 workers. The sale is expected to be final during 2Q 2012, but remains subject to ordinary closing conditions, according to a KPS statement. The company will be renamed Waupaca Foundry Inc., and its president and CEO Gary Gigante and the current management team will remain in place.
KPS formed a new company, W Foundry International, to purchase the TK Waupaca assets in Waupaca (three plants) and Marinette, WI; Tell City, IN; and Etowah, TN. The six foundries produce castings for automakers and manufacturers of off-highway equipment, commercial vehicle, material handling equipment, and general industrial products.
“We are very excited to create an independent Waupaca Foundry,” declared David Shapiro, a KPS managing partner. “Waupaca is the largest company in its industry worldwide with the leading North American market share in each of its diverse end-markets and strong customer relationships that have been developed over decades of partnership.”
KPS has had prior experience in the metalcasting industry. KPS Capital Partners is described as the “manager” of KPS Special Situations Funds: that entity acquired the former Atchison Casting Corp. organization in 2003, and then sold it (as AmeriCast Technologies) to Castle Harland Inc. for a reported $110 million in 2006. Currently it lists no metalcasting assets, though it owns HHI Group Holdings LLC, an important steel forging group.
Shapiro went on to praise Waupaca’s assets, performance, and service, and its commitment to investing in technology and process development.
“We are thrilled to become an independent company under KPS’ ownership,” Gigante confirmed. “KPS’ commitment to manufacturing excellence and enthusiastic support of our extraordinary growth trajectory and globalization initiatives positions our company for continued success. We look forward to continuing to provide our customers with industry leading quality, customer service and innovation.”
ThyssenKrupp put the metalcasting subsidiary on the block last spring, in the course of an organizational review that was meant to “to focus the portfolio” and separate businesses for which it could find “alternative strategic options.” It said last year it would seek “the best owner” for the foundry group. At the same time it offered for sale several metal processing and automotive systems fabricating subsidiaries, some of which have been sold in the interim.
The Duisburg, Germany-based manufacturing conglomerate continues to look for ways to reduce its manufacturing losses, and now acknowledges it is seeking “strategic options” for the carbon and stainless steel plants it started up recently in Alabama and Brazil. Rumors of such a sale have spread in recent months as the company works to stem unexpected losses related to weak European demand and low steel prices.