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U.S. Pipe Sold for $100 Million

March 23, 2012
Private equity sees upside in water infrastructure market

United States Pipe and Foundry Co. LLC has been sold by its parent company Mueller Water Products to an investment group, Wynnchurch Capital, for an estimated $100 million. The sale, which includes a U.S. Pipe affiliate, Fast Fabricators LLC, is described as consisting of $89.8 million in cash and a reimbursement for liabilities estimated at $10.2 million.

Mueller Water Products chairman Gregory E. Hyland explained the sale would allow that company to focus on higher-margin businesses and newer technology initiatives."

"The ductile iron pipe business has been volatile, which has negatively impacted our financial performance and, we believe, masked the true value of our overall business,” Hyland continued. “We have a solid platform for growth, and we believe the financial flexibility generated from the sale of U.S. Pipe, coupled with our strategic vision, will increase our ability to more profitably grow our business."

But, Chris O'Brien, a Wynnchurch Capital managing director, called U.S. Pipe "a critical supplier to the water infrastructure market, which is in great need of investment and repair."

U.S. Pipe is a ductile iron foundry producing a range of cast pipe products, fittings, and related products for water and wastewater management. It has two plants in Bessemer, AL, one of which started up in 2008, and another in Union City, CA. An older plant in Birmingham closed in 2010, and another in Burlington, NJ, closed in 2008.

Wynnchurch Capital is “middle-market private equity investment firm” that has made prior acquisitions of metalcasting operations, though none are listed in its current portfolio. Last fall, together with another investment group, it bought Accuride Corp.’s Fabco Automotive Inc., a manufacturer of commercial vehicle steering components.

Wynnchurch has a co-investor for the U.S. Pipe acquisition, too: Comvest Group.

"U.S. Pipe is a market leader in its industry and has a well-deserved reputation for quality, service and innovation,” according to Terry Theodore, a Wynnchurch partner. “We are excited to have this opportunity to invest in U.S. Pipe and partner with Paul Ciolino and the U.S. Pipe management team to implement a growth strategy that will continue this tradition."