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Increased reinvestment since the Hitachi Metals acquisition has meant revamped operations across Waupaca Foundry’s U.S. facilities.


in owning foundries or expanding foundries. We were not core to their business.”


Te Budd Company, a U.S.-based


manufacturing conglomerate, had owned Waupaca Foundry since 1968 and acted as a middleman between the casting operations and the German parent company. But that company was dismantled in 2007, leaving Wau- paca Foundry under direct oversight from TyssenKrupp. Expenditures that used to take days


now required months for approval. Additionally, with massive amounts of capital directed to its steel opera- tions, TyssenKrupp reduced available resources for the metalcasting facilities. Not only that, return on investment for approved projects was expected to be relatively quick. “A lot of strategic advancements stopped during the recession,” Gigante said. “The focus was on the short-term.” By May 2011, TyssenKrupp announced plans to divest its iron cast- ing division to reduce debt and refocus


20 | MODERN CASTING April 2016


on emerging markets. Te next year, the German conglomerate sold Wau- paca Foundry to KPS Capital Partners, a New York-based private equity firm. The new ownership focused on a


variety of manufacturing facilities, including one small metalcaster, but Waupaca Foundry was its larg- est metalcasting operation by far. Waupaca Foundry management’s excitement about the transition was tempered by suspicions associated with private equity. “We were extremely nervous,” Gigante said. “We worried about assets going out of the company. I thought investment might be reduced even further.” Such hesitation, however, proved


unfounded. KPS increased annual reinvestment—in excess of $40 million after falling to roughly $15 million under TyssenKrupp. Additionally, KPS allowed Waupaca Foundry’s management to operate more freely with minimal oversight. “Tings happen quickly in [the pri- vate equity] world,” Gigante said. “On


our very first day of [KPS] ownership, they approved a project for a new molding line. … Most of our proposals could be approved with a phone call.” Tough investment increased, ROI was expected in less than five years, extending the timeline compared to previous ownership’s while still limit- ing projects to the short- and mid- term. Waupaca Foundry continued to grow coming out of the recession, but KPS began exploring an exit from the metalcasting industry while forecasts called for moderate growth. After exploring a select group of potential buyers for the casting business, KPS reached a deal with Hitachi Metals Ltd. in August 2014. “We needed to add capacity to pro-


duce iron castings,” said Eiji Nakano, managing officer, Hitachi Metals. “Te American market is much stronger than in Japan, so we wanted to acquire iron foundries in the U.S.” Te acquisition, with the new


parent company well established in metalcasting, signaled greater stability for the customers of Waupaca Foundry


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