4 Exits in 5 Days?!?!

KPS Special Situations Fund just announced that it is selling steel casting company AmeriCast Technologies to Castle Harlan for $110 million. Not earth-shaking news in and of itself, except that it represents KPS’ fourth exit in the past five business days.

I have never seen anything quite like it, either in the buyout or venture capital market (not even during the dotcom days). My initial reaction was that KPS is likely super-charging its liquidations, in order to raise a third fund. But that’s apparently wrong, according to data from KPS limited partner CalPERS.

CalPERS reports that KPS Special Situations Fund II closed in 2003, and only was 34% called down as of June 30. In other words, the fund still has a ways to go before needing a successor, considering that KPS has not announced any new deals since that date (only one new portfolio co. since May, plus a few add-on acquisitions).

What is amazing, however, are the return numbers. KPS II had returned over half of its called-down capital through June 30, and now is about to have four additional exits (out of a total portfolio of nine companies). I guess that’s why it’s IRR is listed at 54.9 percent.

I’m scheduled to speak with someone from the firm later today about this hot streak. In the meantime, here are the other three recent KPS exit announcements:

– KPS Special Situations Funds sold Ebro Electronics GmbH & Co. KG to Nova Analytics Corp. for an undisclosed amount. Ebro is a German producer of instruments that measure temperature, pressure, humidity and pH.

– KPS Special Situations Funds has agreed to sell Speedline Technologies Inc. to Illinois Tool Works (NYSE: ITW). No financial terms were disclosed. Speedline is a Franklin, Mass.-based maker of equipment used in the assembly of printed circuit boards and semiconductor packages.

– KPS Special Situations Fund has agreed to sell Wire Rope Corporation of America to Fox Paine & Co. No financial terms were disclosed for the deal, which is expected to close within 90 days. WRCA is a St. Joseph Mo.-based producer and marketer of specialty wire ropes.

Update: I just spoke to Michael Psaros, a co-founder and managing principal at KPS. He says that the fund was closer to 50% called down as of June 30, and expects to make 2-3 new deals before being fully invested in Q1 or Q2 2007. It also plans to keep making add-ons to a pair of platform acquisitions companies: Blue Water Automotive and Hephaestus Holdings.

As to all the recent exit activity? He calls it a pleasant coincidence.