New York, NY (March 21, 2011) -- KPS Capital Partners, LP ("KPS") announced today that its portfolio company, HHI Group Holdings, LLC (“HHI” or the “Company”), has completed a third successful recapitalization in the last twelve months. HHI raised $425 million of new financing, including a $100 million asset based revolving credit facility and a $325 million term loan. The proceeds of the recapitalization were used to refinance outstanding debt, to fund a $100 million cash distribution to stockholders and to fund the Company’s continued growth.
Following the recapitalization, HHI remains conservatively capitalized with the continued support of KPS, its majority stockholder. KPS and minority stockholders, including MC Capital Inc. (a subsidiary of Mitsubishi Corp.) and HHI management, continue to own 100% of HHI’s common stock.
HHI has completed three recapitalizations in less than one year. HHI completed a $300 million recapitalization on March 31, 2010 and a $30 million upsizing of its term loan on October 1, 2010. The combined proceeds of the three recapitalizations, as well as the Company’s strong cash flow, resulted in more than $300 million in cash distributions to stockholders.
The financing was provided by a syndicate of banks and institutional investors with Bank of America Merrill Lynch acting as Sole Lead Arranger on the $100 million asset based revolving credit facility, and Bank of America Merrill Lynch, Goldman Sachs and Credit Suisse acting as Joint Lead Arrangers on the $325 million term loan.
Jenner & Block LLP served as legal counsel to HHI with respect to the recapitalization.
About HHI Group Holdings, LLC
HHI is the largest independent 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. The company operates through its Jernberg Holdings, LLC, Impact Forge Group, LLC, HHI FormTech, LLC, Kyklos Bearing International, LLC (“KBI”) and Cloyes Gear and Products, Inc. subsidiaries. With over 2,700 employees, HHI is headquartered in Royal Oak, Michigan and operates 14 manufacturing facilities located in Arkansas, Illinois, Indiana, Michigan and Ohio. For more information, please visit www.hhigroupholdings.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.
