Castle Harlan has agreed to sell AmeriCast Technologies Inc., an Atchison, Kansas-based maker of complex steel castings, to Australia-based Bradken Ltd. (ASX: BKN). The deal is valued at approximately $288 million. Castle Harlan bought AmeriCast in late 2006 from KPS Special Situations Fund for $110 million. That deal also saw Bradken — then a portfolio company of Castle Harlan Australian affiliate Champ — acquire a 19% equity interest in AmeriCast.
Castle Harlan, Inc., the New York private equity investment firm, announced today that it had agreed to sell AmeriCast Technologies, Inc., a North American leader in the design and manufacture of large, complex steel castings, to Bradken Ltd., a leading publicly-traded Australian manufacturer of cast steel and other products, primarily for the mining and railroad industries, in a transaction valued at approximately $288 million.
AmeriCast, based in
Howard Morgan, a senior managing director at Castle Harlan who leads the firm's AmeriCast team, said, “AmeriCast has been an excellent investment for Castle Harlan and its limited partners, and we are pleased that we have been able to add significant value to the company during our 21-month period of ownership. Annual EBITDA has grown more than 100 percent through both organic growth and strategic acquisitions. We're confident this growth will continue.”
Based on the value of this transaction, Castle Harlan and AmeriCast management will realize a collective gain of more than three times on their original invested capital, which represents an IRR of more than 90 percent, Morgan said.
The transaction has received Hart-Scott-Rodino Act governmental approval and is expected to close in the next week. The Company's 11% Notes Due 2014 will remain outstanding after completion of the transaction, in accordance with the terms of the indenture governing the notes.
Bradken had purchased a 19 percent minority equity interest in AmeriCast when Castle Harlan acquired a controlling stake in the company in November 2006. Until it went public in August 2004, Bradken had been a portfolio company of Castle Harlan's Australian affiliate CHAMP Private Equity in
“We know Bradken very well and have had long relationships with its CEO Brian Hodges, Chairman Nick Greiner, and many of the senior Bradken management team,” Morgan said.
Anand Philip, a senior associate who led Castle Harlan's negotiating team on this transaction, adds, “We are confident that, under Bradken's leadership, the company will continue to prosper. Post closing, we intend to support Bradken in its effort to grow AmeriCast and its business in
After acquiring AmeriCast in November 2006, Castle Harlan assisted the company in purchasing Atlas Castings and Technology in April 2007 and A.G. Anderson in April of this year. Atlas makes large specialty steel castings for the energy and defense industries; A.G. Anderson produces castings in stainless steel and complex ferrous alloys, primarily for the energy industry. In January 2008, Castle Harlan assisted the company in divesting its Prospect division, which had been identified as non-core to the AmeriCast business.
Taking account of those acquisitions and the divestiture, AmeriCast is expected to have total revenues and EBITDA this year of more than $340 million and $47 million, respectively. When Castle Harlan purchased the company in November 2006, its revenues were below $200 million.