AmeriCast Sold for $110 Million

Nov. 15, 2006
New private-equity ownership, and a global connection

November 15, 2006 — Castle Harlan Inc., a private equity firm, has agreed to acquire AmeriCast Technologies Inc. from KPS Special Situations Fund L.P. for a reported $110 million. AmeriCast is an organization comprised of several of the assets of the former Atchison Casting Corp., which KPS acquired in November 2003.

"The business will be very well capitalized," promised Howard D. Morgan, a Castle Harlan senior managing director who led the firm's acquisition team, "and has cash and an untapped revolving loan to invest prudently to meet customer needs."

Also gaining an equity stake in AmeriCast will be the firm's present management and Bradken, a publicly traded Australian company and a manufacturer of cast steel products to the mining and rail industries in Australia. Bradken is a former portfolio company of CHAMP Private Equity, a Castle Harlan affiliate, and Bradken CEO Brian Hodges will be a director of AmeriCast.

AmeriCast president and CEO Tom Armstrong, stated Castle Harlan's investment and Bradken's experience “will help us reach the next stage of our company's continued growth.”

AmeriCast, based in Atchison, KS, produces large steel castings for mining trucks, locomotives, and similar applications. Its largest products weigh 65,000 pounds, and its customers include Caterpillar, Electro-Motive Diesel, and General Electric.

The sale is the most recent of numerous investments made by private equity groups in the metalcasting industry. KPS Special Situations Fund L.P. purchased Atchison Steel Castings, in Atchison, KS and St. Joseph, MO; Amite Foundry, Amite, LA; Prospect Foundry, Minneapolis; London Precision Machine, London, ON; and ACC Global, Houston, for $40 million.

Atchison Casting Corp. had filed for Chapter 11 bankruptcy in August 2003. In October of that year Atchison sold its Inverness Castings Group, Dowagiac, MI, to WynnChurch Capital for a reported $8.25 million. When the sale closed in 2003, KPS reported it had invested $55 million in the AmeriCast purchase, including working capital, and agreed to a four-year labor agreement with employees.