KPS Capital Partners said Monday that its portfolio company HHI Group Holdings has completed a seventh recapitalization. The recap was funded by a combination of a $50 million upsizing of the company’s term loan, cash on hand and the Company’s asset based revolving credit facility, the firm said. Proceeds will be used to fund a $70 million cash distribution to stockholders.
KPS Capital Partners, LP (“KPS”) announced today that its portfolio company, HHI Group Holdings, LLC (“HHI”), completed its seventh successful recapitalization since its creation. The proceeds of the recapitalization – funded by a combination of a $50 million upsizing of the Company’s term loan, cash on hand and the Company’s asset based revolving credit facility – were used to fund a $70 million cash distribution to stockholders.
Following the seventh recapitalization, HHI remains conservatively capitalized and has 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 outstanding common stock.
HHI has distributed over $418.8 million of cash to its stockholders since its creation in 2006.
Financing for the transaction was provided by a syndicate of banks and institutional investors with Bank of America Merrill Lynch and Goldman Sachs acting as Lead Arrangers on the upsizing of the Company’s term loan.
Jenner & Block LLP served as legal counsel to HHI with respect to the transaction.
About HHI Group Holdings, LLC
HHI Group Holdings, LLC (“HHI”), through its Jernberg Holdings, LLC, Impact Forge Group, LLC, HHI FormTech, LLC, Kyklos Bearing International, LLC (“KBI”) and Cloyes Gear and Products, Inc. subsidiaries, 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. With over 3,000 employees, HHI is headquartered in Royal Oak, Michigan and operates 15 manufacturing facilities located in Arkansas, Illinois, Indiana, Michigan and Ohio. For more information, please visit www.hhigroupholdings.com.
About KPS Capital Partners, LP
KPS Capital Partners, LP is the manager of the KPS Special Situations Funds, a family of private equity funds with over $2.8 billion of committed capital focused on constructive investing in restructurings, turnarounds and other special situations. KPS has created new companies to purchase operating assets out of bankruptcy; established stand-alone entities to operate divested assets; and recapitalized highly leveraged public and private companies. The KPS investment strategy targets companies with strong franchises that are experiencing operating and financial problems. KPS invests its capital concurrently with a turnaround plan predicated on cost reduction, capital investment and capital availability. Typically, the KPS turnaround plan is accompanied by a financial restructuring of the company’s liabilities.