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billion to $60-70 billion. Because the transactions being conducted are larger than before, average yield size has shown a similar pattern as the market has improved. “Why?” asked Rosbrook.


“From the seller’s perspective, owners are gaining confi dence, and they are not selling from trough earnings, so the prices are increasingly attractive for a seller. But what is motivating the buyers?” Two types of buyers make


moves in a market like metal- casting—investors or corpora- tions. Private investors, such as equity firms, are making more deals today due to large amounts of procured but unallocated capi-


Fig. 2. Estimates of metalcasting industry mergers and acquisitions indicate the industry has outpaced other middle market companies, meeting and ex- ceeding previous highs.


tal. Strategic buyers, likewise, are becoming more active. “[Strategic buyers] have healthy balance sheets,” Rosbrook said. “T is is a big diff erence from the last couple of recessions where big companies were over-leveraged and back on their heels with respect to acquisitions. We will come out of this recession with corporate cash as a percent of total assets at a record high. T e fi repower is there to make acquisitions.” According to Rosbrook, while


stock prices are increasing, most of the deals being made in the middle market range are conduct- ed with cash as the primary con- sideration, as opposed to stock. “Organic growth for these buy-


lion through the end of 2013 to make the additions. “The addition will add at least 33% to our existing capac-


ity, which represents probably another 350 tons per month,” said John Workman, the company’s vice president.


STRATEGIC PURCHASES South America-Based Tupy Buys Mexico-Based Cifunsa and Technocast November 16, 2011—Grupo Industrial Saltillo S.A.B. de C.V.,


Saltillo, Mexico, announced it reached an agreement to sell its iron block and head business, which includes Cifunsa Die- sel and Technocast, to Tupy S.A., Joinville, Brazil. Technocast is a joint venture Grupo Industrial Saltillo launched in 2007 with Caterpillar, Peoria, Ill. The acquisitions move Tupy into the Mexican market, further opening North America to the South American company. “The auto parts business (calipers, crankshafts, brackets,


differential cases and others) produced on vertical molding lines we are keeping and strongly investing in,” said Luis Arenas, strategic planning manager for Grupo Industrial Saltillo’s foundry sector.


Hayes Lemmerz Sold to Brazilian Company October 6, 2011—Cast and forged wheel maker Hayes


Lemmerz International, Northville, Mich., entered into an agreement to be purchased by Iochpe-Maxion S.A., Sao Paulo, Brazil. The global wheels business was purchased in an all-cash transaction for approximately $725 million and combined with the wheels businesses of Iochpe-Maxion. “One of our principal strategies is to sustainably grow our core business internationally,” said Dan Ioschpe, Iochpe-


Maxion S.A.’s chief executive offi cer.


PRIVATE EQUITY PURCHASES Consolidated Precision Products Purchased by Equity Firm September 12, 2011—Consolidated Precision Products


Corp. (CPP), Pomona, Calif., announced it will be recapi- talized by Warburg Pincus, New York. The primarily aero- space caster said the private equity fi rm, in partnership with the company’s existing management team, reached an agreement with the company’s fi nancial sponsor, Arlington Capital Partners, Washington, D.C. Terms of the transaction are not disclosed. “We believe Warburg Pincus is an ideal partner for


CPP’s growth and expansion in the coming years,” said Steve Clodfelter, CPP’s chief executive offi cer and president. “Warburg Pincus has deep domain expertise in aerospace and defense, as well as a known track record of strengthening the global platforms of its portfolio companies.”


Diecaster Dynacast Changes Hands June 6, 2011—Dynacast, Charlotte, N.C., was sold by


holding company Melrose PLC, London, to a newly incor- porated company, KDI Holdings Inc., managed by private investment fi rm Kenner & Company Inc., New York. Ac- cording to a Melrose executive, Dynacast performed well in the six years it was in its portfolio. “As a result of the improvement in its performance,


we have quadrupled the shareholders’ investment in Dynacast within six years,” said Melrose Chairman Christopher Miller. 


Mar/Apr 2012 | METAL CASTING DESIGN & PURCHASING | 27


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