New York, NY (April 30, 2008) -- KPS Capital Partners, LP (“KPS”) today announced that its portfolio company Hephaestus Holdings, Inc. ("HHI”), through its indirect, wholly-owned subsidiary Kyklos Bearing International, Inc. ("KBI"), has completed the acquisition of substantially all the non-cash assets primarily used in the North American Bearings Business of Delphi Corporation (the “Bearings Business”). KBI acquired the Bearings Business free and clear of substantially all liens, claims, encumbrances, and interests through an auction conducted as part of a sale process under Section 363 of the United States Bankruptcy Code. The U.S. Bankruptcy Court for the Southern District of New York approved the transaction on March 19, 2008.
HHI is the leading independent manufacturer of forged parts for the North American automotive industry. The Bearings Business is the leading producer of Gen III wheel bearings in North America and the primary supplier of this product to General Motors Corporation in North America. The Bearings Business, including the New Departure Hyatt brand, invented the current Gen III wheel bearing technology and has maintained its industry leading technological advantage. It enjoys a proven track record for the industry’s lowest warranty rates and highest quality standards.
KBI acquired substantially all of the Bearings Business’s inventory, intellectual property, and machinery and equipment, including the manufacturing and engineering facility located in Sandusky, Ohio. KBI has also hired substantially all of the Bearings Business’s employees and has assumed all of the customer and supplier contracts.
Michael G. Psaros, a Managing Partner of KPS, said: “We are delighted with HHI’s profitable growth under George Thanopoulos’s leadership and look forward to supporting the company as it proceeds with its aggressive growth and industry consolidation strategies. HHI has now completed three successful acquisitions since its creation by KPS in September 2005, and the company has also achieved significant organic growth and customer diversification. HHI is well capitalized, with access to significant additional capital, and we welcome inquiries from potential sellers of forging businesses, assets or products lines that contain large forging value content.”
George Thanopoulos, Chief Executive Officer of HHI, said, "I am thrilled with the success and rapid growth of HHI since its creation. HHI was formed to consolidate the North American forging industry and to expand into products and markets where our forging and metalworking expertise result in immediate synergy and value creation. We are very excited to expand into the wheel bearings business, and we look forward to becoming a significant global competitor in the industry.”
About KPS Capital Partners
KPS, through its affiliated management entities, is the manager of the KPS Special Situations Funds, a family of investment funds with approximately $21.8 billion of assets under management (as of June 30, 2024). For over three decades, the Partners of KPS have worked exclusively to realize significant capital appreciation by making controlling equity investments in manufacturing and industrial companies across a diverse array of industries, including basic materials, branded consumer, healthcare and luxury products, automotive parts, capital equipment and general manufacturing. KPS creates value for its investors by working constructively with talented management teams to make businesses better, and generates investment returns by structurally improving the strategic position, competitiveness and profitability of its portfolio companies, rather than primarily relying on financial leverage. The KPS Funds’ portfolio companies generate aggregate annual revenues of approximately $21.6 billion, operate 245 manufacturing facilities in 26 countries, and have approximately 64,000 employees, directly and through joint ventures worldwide (as of June 30, 2024, pro forma for the recent acquisitions of Sport Group and Innomotics which closed on July 8, 2024 and October 1, 2024, respectively). The KPS investment strategy and portfolio companies are described in detail at www.kpsfund.com.
