HHI to Continue Legacy of Success Created over Past Seven Years, Transforming North American Automotive Forgings Industry
New York, October 8, 2012 – American Securities LLC, a U.S. private equity firm, and KPS Capital Partners, a manager of special situation funds, today announced the completion of a transaction involving HHI Group Holdings. American Securities has acquired HHI, a manufacturer of highly engineered, safety-critical forged components for automotive customers, from KPS Capital Partners. Financial terms of the deal were not disclosed.
HHI is the largest North American manufacturer of highly engineered, safety-critical forged components for automotive customers, principally in the light vehicle market and a leading manufacturer of complex, highly engineered powdered metal powertrain components and wheel bearings.
HHI was created by KPS in September 2005 in partnership with George Thanopoulos, Chief Executive Officer, through a series of acquisitions including Jernberg Forge, Impact Forge, FormTech Industries and Cloyes Gear and Products, among others. In addition, HHI, through its subsidiary, Kyklos Bearing International, acquired Delphi Corporation’s North American wheel bearings business.
“We are proud of the significant organic growth of the HHI business and are grateful to KPS for providing our team with leadership, expertise, capital and other resources as we built this platform,” said Thanopoulos. “We look forward to partnering with American Securities to continue our commitment to quality, innovation, customer service and manufacturing excellence.”
“HHI is an excellent fit in our portfolio of companies as a leader in its market of highly specialized products,” added Kevin S. Penn, Managing Director at American Securities. “We look forward to working with a highly talented management team as we continue to strengthen and grow this business in the automotive-component market.”
Said Michael Psaros, a Managing Partner of KPS, “HHI is a validation of the KPS investment strategy, and we take immense pride in the Company’s accomplishments. HHI is the result of five unique acquisitions and subsequent turnarounds of companies that were formerly operating in bankruptcy or in distress. Under our ownership, these assets were transformed into a diversified, value-added, highly specialized company in the automotive industry. We congratulate and thank George Thanopoulos and his management team for their strategic vision and brilliant tactical execution. We also thank the United Auto Workers (UAW), the United Steelworkers (USW) and Workers United (SEIU) for their critical contributions toward the success of HHI.”
Jenner & Block served as legal counsel to HHI with respect to the transaction, Paul Weiss Rifkind Wharton & Garrison LLP served as legal counsel to KPS, and Weil, Gotshal and Manges LLP served as legal counsel to American Securities. Goldman, Sachs & Co. acted as financial advisor to KPS and HHI with respect to the transaction.
About HHI Group Holdings, LLC
HHI Group Holdings, LLC ("HHI"), through its Jernberg Holdings, LLC, Impact Forge Group, LLC, HHI FormTech, LLC, Kyklos Bearing International, LLC and Cloyes Gear and Products, Inc. subsidiaries, is the largest manufacturer of highly-engineered symmetrical and asymmetrical forged parts for various power train and wheel-end applications, a leading manufacturer of wheel bearings, and one of the few manufacturers of engine timing drive systems for the North American automotive industry. With over 3,000 employees, HHI is headquartered in Royal Oak, Michigan and operates 15 manufacturing facilities located in Arkansas, Illinois, Indiana, Michigan and Ohio. For more information, please visit www.hhigroupholdings.com.
About American Securities
Based in New York with an office in Shanghai, American Securities is a leading U.S. private equity firm that invests in market-leading North American companies with annual revenues generally ranging from $500 million to $2 billion. American Securities has over $8 billion under management and is currently investing from its sixth fund. The firm traces its roots to a family office founded in 1947 to invest and manage a share of the fortune created from the growth of Sears, Roebuck & Co in the early 1900s. More information about American Securities can be found at www.american-securities.com.
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.
