ThyssenKrupp sells ThyssenKrupp Waupaca Inc. to KPS Capital Partners

KPS commits to pursuing continuity and further growth for the company.

ThyssenKrupp AG, a global materials and technology group based in Essen, Germany, announces the sale of ThyssenKrupp Waupaca Inc., its U.S. foundry business, to an affiliate of KPS Capital Partners, LP (KPS), a New York-based private-equity firm. A “Stock Purchase Agreement” (SPA) signed by both parties was approved by the ThyssenKrupp AG Supervisory Board earlier today.

With three plants in Waupaca and one in Marinette, WI, and facilities in Tell City, IN, and Etowah, TN, ThyssenKrupp Waupaca, Inc., is the largest independent iron foundry in the world. The company employs approximately 3,500 in all three states and had sales of nearly $1.48 billion in the last fiscal year. The foundry group produces gray and ductile iron castings using state-of-the-art technology and serves the automotive, commercial truck, agriculture, construction, and other industrial markets.

The decision to divest ThyssenKrupp Waupaca comes as part of the wider strategic plan and portfolio adjustment announced by the ThyssenKrupp Group in May, 2011. 

ThyssenKrupp Waupaca President and CEO Gary Gigante noted that the decision to sell the U.S.-based foundry to KPS came after extensive due diligence to identify a buyer that met the prerequisites outlined by ThyssenKrupp’s “best owner principle.” Under the “principle,” the buyer was required to provide a detailed strategy for the continuity and growth of ThyssenKrupp Waupaca’s business that also took into account the interests of employees and customers. 

“We wanted to be sure that Waupaca’s next owner shared our commitment to its future and that it was ‘business as usual’ for our workers and customers the day after the deal is finalized. I believe that we can achieve that goal,” Gigante said.

David Shapiro, a KPS Managing Partner, says, “We are very excited to create an independent Waupaca Foundry. 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. The company possesses world-class assets, unrivaled scale and scope, industry leading quality and service, and a commitment to investing in state-of-the-art technology and process development.”  

“We look forward to working with Chief Executive Officer Gary Gigante, his management team and all of Waupaca’s employees to build on this great platform by strategically expanding into regions where Waupaca’s key customers are growing.  The combination of the company’s unique strengths and the financial resources of KPS will provide the foundation for Waupaca’s future growth, both organically and through acquisitions in North America and around the world,” he adds.

KPS Capital Partners, LP is the manager of the KPS Special Situations Funds, a family of private equity funds with over $2.8 billion of assets under management focused on constructive investing in corporate carve-outs, restructurings and other special situations.

Torsten Gessner, Chairman and CEO of ThyssenKrupp North America, underscored that the divestment will enable ThyssenKrupp to better capitalize on growth opportunities in the region.

“ThyssenKrupp has a diverse footprint in North America. In the last fiscal year, we employed 24,600 in the United States, Canada and Mexico, and had sales of nearly 12 billion dollars. So as we are divesting ThyssenKrupp Waupaca, our other companies are adding jobs, increasing sales and investing in plant expansions and acquisitions across the region,” Gessner adds.

Gessner heads ThyssenKrupp North America’s new Regional Headquarters in Chicago. The headquarters, which will open in summer of this year, will provide integrated strategic direction and services for all ThyssenKrupp companies in North America, and help identify new markets and opportunities for growth in the region.

The closing of the transaction is expected during the second quarter of 2012 and is subject to customary closing conditions. ThyssenKrupp Waupaca, Inc. will be renamed Waupaca Foundry, Inc. upon closing of the transaction. Financial terms of the transaction were not disclosed.