The producer of automotive parts and specialty steel, Hitachi Metals, stated yesterday that it will buy the world’s biggest provider of iron castings, Waupaca Foundry Inc. The firm will be bought at $1.3 billion in cash from KPS Capital Partners LP, the buyout firm of the arrangement.
Hitachi Metals found the deal to be a major step for the firm to obtain an expanded customer base and big production faculty.
Presently, the market capitalization of Tokyo-based Hitachi Metals is $7.3 billion. On the other hand, the Wisconsin-based Waupaca, which services North America’s transport machinery market, has reported annual net sales of $1.74 billion dated until September.
Waupaca approved the acquisition of its United States-based six manufacturing plants of the company. KPS found the deal to be a bell ringer. The firm had purchased Waupaca from ThyssenKrupp AG, a German industrial corporation, in 2012. Although not allowed to be reported, an unknown source claimed that KPS had earned five times its investment for Waupaca, which totaled $226 million. KPS reportedly had the foundry employing an estimated 3,900 people. In the recent fiscal year of ThyssenKrupp AG, the sales amounted to $1.74 billion.
Kazuyuki Konishi, Hitachi Metals chairman, declared that the business base of Hitachi Metals will definitely expand through the Waupaca acquirement. The chairman also disclosed the firm’s plans of extending its business grid through acquisitions in the future.
It became evident that Hitachi Metals is dilating its iron castings sector as proven by its prior acquisitions of Mitsubishi Materials alloy operation and a couple of Indian metal businesses.
In October, finishing point of the arrangement between the two parties is scheduled. The regulator’s approvals are still necessitated for the matter.
Hitachi Metals reported shares of 1,734 yen (up to 0.9% in Tokyo), which were declared before the inauguration of the arrangement.
Hitachi Metals has long been established as one of the top ranking providers of products out of high-end technologies and development means. The company was founded in 1910 and named Tobata Foundry Co. previously. It is the main goal of Hitachi Metals to provide society assistance and high quality management procedures. The firm declared that it will nurture the management’s connection to corporate social responsibility (CSR) concept. For the forthcoming years, the conglomerate is planning to carry on growth along with its patrons, employees, partners, shareholders, and linked communities among others. It makes use of its “Materials Magic” communications symbol.