Daily News: January 12, 2012

SSG Advises Hussey Copper in Asset Sale to Patriarch Affiliate

SSG Capital Advisors acted as the exclusive investment banker to Hussey Copper Ltd. in the sale of substantially all of its assets to an affiliate of Patriarch Partners. The transaction closed in mid-December 2011.

Founded in 1848, Hussey is a manufacturer of copper products in the United States. With a fully integrated mill, the company provides a wide range of flat rolled copper products for the electrical distribution, industrial and residential construction markets. Hussey produces a wide range of copper and, to a lesser extent, copper-nickel products. The company has pursued a strategy of focusing on bar, strip, sheet and plate products where it has a significant market share. Principally, copper bar is used by electrical equipment manufacturers and contractors to carry heavy electrical currents in industrial plants, commercial buildings and in switchgear.

Although Hussey had a history of strong revenue growth and positive EBITDA, the global economic downturn had a significant impact on the copper industry and the company’s financial performance. Reduced corporate capital spending led to a decreased demand for its products during 2009 and 2010. Although the company experienced improved performance at the beginning of 2011, liquidity constraints coupled with recent copper price volatility limited the company’s ability to purchase inventory and severely constrained operations.

Hussey engaged SSG in April 2011 to explore a sale of substantially all of its assets. SSG marketed the company to a wide range of strategic and financial parties and received multiple offers for the company. An acquisition entity of Kataman Metals was chosen as the stalking-horse bidder at $84.7 million. The company filed Chapter 11 in September 2011. SSG remarketed Hussey over seven weeks and had a mini auction over two days at the bid procedures hearing, resulting in a better stalking horse offer from Kataman plus additional consideration and without a breakup fee. By the bid deadline, four qualifying overbids were received, which resulted in a robust section 363 auction with Patriarch emerging as the winning bidder for a price approximately 27% higher than the original stalking-horse bid. The gross purchase price of $107.75 million, subject to a working capital adjustment, was sufficient to pay secured debt in full and provide a sizeable fund for distribution to the unsecured creditors.

Patriarch Partners, is a private equity firm and holding company managing 76 companies with annual revenues of more than $8 billion. Founded by Wall Street veteran Lynn Tilton in 2000, Patriarch is dedicated to saving companies that have fallen from economic favor.

Other professionals who worked on the transaction include: Jeffrey C. Hampton, Mark Minuti, Adam H. Isenberg, Richard D. Leigh, Robyn F. Pollack and Monique A. Bair of Saul Ewing, counsel to Hussey; Dalton T. Edgecomb (now of Winter Harber), John Owens and Brett M. Anderson of Huron Consulting Group, restructuring advisor to Hussey; Lawrence F. Flick, II, Regina Stango Kelbon, Michael C. Graziano and Heather Sonnenberg of Blank Rome, counsel to the senior lender syndicate; Sharon L. Levine, Wojciech F. Jung and Lowell A. Citron of Lowenstein Sandler, counsel to the Unsecured Creditors Committee; Conor P. Tully, Michael J. Talarico and Andrew Bekker of FTI Consulting, financial advisor to the Unsecured Creditors Committee; and Gregory M. Gordon, Carl E. Black and Steven D. Stennett of Jones Day, counsel to Patriarch.

Previously on abfjournal.com:

Tilton’s Patriarch Partners Wins Auction for Hussey Copper, Wednesday, November 16, 2011