KPS Capital to Sell Waupaca Foundry to Hitachi Metals
KPS Capital Partners announced it signed a definitive agreement, through an affiliate, to sell its portfolio company Waupaca Foundry to Hitachi Metals for $1.3 billion in cash.
Paul, Weiss, Rifkind, Wharton & Garrison; and Morgan Stanley served as legal counsel and financial advisor, respectively, to KPS and Waupaca with respect to the transaction.
David Shapiro, a managing partner of KPS, stated, “The success of our investment in Waupaca demonstrates KPS’ ability to see value where others do not, to buy right and to make businesses better. In 2012, we recognized the transformation of the North American iron foundry market and the unrivaled importance of Waupaca to its customers and the end markets that it serves. The sale of Waupaca to Hitachi Metals, a leading multinational corporation, is a great outcome for our investors, Waupaca, its management, employees and customers.
“KPS worked with management to improve every aspect of Waupaca’s business, resulting in profitability increasing by more than 40% in just over two years. The investment return generated for our investors in the Waupaca transaction is further validation of the KPS investment strategy, which we have successfully executed over many years and across numerous economic cycles. We are very proud to have had the opportunity to partner with Gary Gigante, his management team and all the dedicated employees of Waupaca. The material value created for our investors since 2012 is the result of their collective effort, for which we are very grateful. We are confident that Waupaca will continue to grow and prosper in the future as part of Hitachi Metals,” Mr. Shapiro concluded.
Gary Gigante, CEO of Waupaca, added, “KPS recognized the potential of our business two years ago. Working in partnership with KPS, we invested significantly in our operations and people, which included an expansion of our production capacity and launching numerous continuous improvement initiatives across all six of our foundries. We are very grateful to KPS for its leadership and its commitment to improving and growing our business. We are thrilled to join Hitachi Metals, which has the resources, foundry experience, access to capital and global reach that will enable Waupaca to achieve an even higher level of success.”
Completion of the transaction, which is expected during the fourth quarter, is subject to customary closing conditions.
Waupaca Foundry produces ductile iron and gray iron castings using state-of-the-art technology.