New York, NY (November 19, 2003) -- KPS Special Situations Fund II announced today that it has entered into an asset purchase agreement to acquire the remaining operating assets of Atchison Casting Corporation (Atchison) out of bankruptcy. Under the terms of the asset purchase agreement, KPS will form a new company to purchase five business units of ACC for a total consideration of $40 million.
Atchison (www.atchisoncasting.com) is a world leader in the design, manufacture and supply of highly-engineered steel and iron sand castings, machined components and assemblies. Atchison casts large and difficult-to-manufacture parts and is a critical supplier to Fortune 50 manufacturers in the locomotive, mass transit, mining, construction and heavy-duty truck industries. KPS will acquire five Atchison business units: Atchison Steel Castings based in Atchison, Kansas and St. Joseph, Missouri; Amite Foundry based outside of New Orleans, Louisiana; Prospect Foundry based in Minneapolis, Minnesota; London Precision Machining based in London, Ontario; and ACC Global based in Houston, Texas.
KPS will invest substantial capital in the transaction and will also provide interim financing for Atchison between the closing of the transaction and the final placement of an asset-based lending facility for the new company. The support and active participation of Atchison's two trade unions - the United Steelworkers of America and the Glass, Molders, Pottery, Plastics and Allied Workers International Union - are critical to the KPS investment and the success of the KPS acquisition.
Tom Armstrong, the current Chief Executive Officer of Atchison, is expected to remain with the new company. "We are pleased to have attracted the support of KPS as the likely investor group to bring this company out of bankruptcy. Their capital, experience with the bankruptcy process and expertise in implementing successful turnarounds will be invaluable to the future of this company."v
The proposed transaction remains subject to a number of conditions, including the completion of new labor agreements, the completion of environmental review and other customary legal and business conditions. In addition, the terms of the KPS asset purchase agreement will be subject to more favorable offers for the Atchison assets at a standard bankruptcy auction. KPS and Atchison expect to complete the transaction in December 2003.
About KPS Capital Partners
KPS, through its affiliated management entities, is the manager of the KPS Special Situations Funds, a family of investment funds with approximately $21.8 billion of assets under management (as of June 30, 2024). For over three decades, the Partners of KPS have worked exclusively to realize significant capital appreciation by making controlling equity investments in manufacturing and industrial companies across a diverse array of industries, including basic materials, branded consumer, healthcare and luxury products, automotive parts, capital equipment and general manufacturing. KPS creates value for its investors by working constructively with talented management teams to make businesses better, and generates investment returns by structurally improving the strategic position, competitiveness and profitability of its portfolio companies, rather than primarily relying on financial leverage. The KPS Funds’ portfolio companies generate aggregate annual revenues of approximately $21.6 billion, operate 245 manufacturing facilities in 26 countries, and have approximately 64,000 employees, directly and through joint ventures worldwide (as of June 30, 2024, pro forma for the recent acquisitions of Sport Group and Innomotics which closed on July 8, 2024 and October 1, 2024, respectively). The KPS investment strategy and portfolio companies are described in detail at www.kpsfund.com.
