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Ellwood Group Acquires Closed Die Forger Interstate Southwest

09/09/2008 - Ellwood Group acquires Interstate Southwest LTD from Balmoral Fund I LP and senior management in a stock transaction effective August 31, 2008.

Ellwood Group Inc (EGI) has acquired Interstate Southwest LTD (ISW) from Balmoral Fund I LP and senior management in a stock transaction effective August 31, 2008. Terms of the deal were not disclosed.
 
Interstate Southwest LTD, a leading provider of closed die steel forgings from 10 to 3000 lb, specializes in the production of large components with complex geometries utilizing a variety of large forging hammers (up to 50,000 lb) and mechanical presses (as large as 7000 tons). Its forgings are sold to companies servicing the heavy machinery, oil and gas, energy, military, heavy truck and automotive industries.
 
"Ellwood is very excited about the acquisition of ISW,” said Kevin Handerhan, Chief Operating Officer for Ellwood Group's forging and casting companies. “ISW has outstanding people and excellent capabilities which will expand what we can offer to our existing customers. ISW also brings new products and customers to EGI. We intend to make the investments in people and facilities to enable ISW to remain a successful and growing company for the future."
 
ISW, a major company in Navasota, Texas, since 1972, was purchased from Citation Corp. in 2007 by Balmoral Fund I LP and senior management after the company had experienced years of poor operating and financial performance.
 
"We're extremely pleased that Ellwood has acquired Interstate," said George Thomas, President of ISW. “Ellwood is a strong company in the business of manufacturing forgings and is dedicated to the business of operating companies for the long haul. I believe they will bring continued stability to the company for our employees, our customers and the community for many years."
 
Following EGI’s acquisition, Mark Cianci, President of EGI’s Ellwood Texas Forge (ETF), will assume leadership of both ETF and ISW. ISW will operate under the name of Ellwood Texas Forge Navasota (ETFN).
 
Outgoing Chairman of ISW and Managing Director of Balmoral Advisors LLC, Jonathan Victor added, "George Thomas, Balmoral and the entire ISW team have worked very hard to turn around a very troubled forging business into a healthy and growing one. The company has vastly improved manufacturing efficiency and increased the capabilities of its personnel and equipment. ISW is now very effective at addressing customer needs. Today, it is clearer than ever that everyone's hard work has paid off for all ISW stakeholders, including shareholders, customers and employees."
 
National City Capital Markets was engaged to manage the sale of ISW.
 
Interstate Southwest LTD, a leading provider of closed die steel forgings from 10 to 3000 lbs, specializes in large components with complex geometries. ISW also provides additional value-added services to their customers such as heat treating and machining. Its forgings are sold to companies servicing the heavy machinery, oil and gas, energy, military, heavy truck and automotive industries. Balmoral and the present management team engineered a strong turnaround for the company over the past 20 months.
 
Ellwood Group Inc. is a privately held company headquartered in Ellwood City, Pa., with sales in excess of 1.3 billion dollars worldwide and roughly 1700 employees. It has a number of companies involved in the open and closed die forging business in the United States, including Ellwood Texas Forge (ETF) in Houston, Texas.
 
Balmoral Fund I L.P. is a Los Angeles-based private equity fund that makes control as well as minority investments in recapitalizations, restructurings and buyouts of companies that have become burdened or distressed due to high leverage, under-management, cyclical challenges, and limited access to capital. Balmoral focuses on companies with sales of $25 million to $500 million and has maximum structuring flexibility.
 
National City Capital Markets provides strategic solutions including financial advisory, capital raising, capital commitment and risk management solutions to our corporate middle market and private equity clients. Backed
by the resources of one of the nation's largest financial institutions, National City Corp., it is committed to building long-term relationships that help clients address business challenges, maximize value and execute their strategic goals.
 
National City Corp., headquartered in Cleveland, Ohio, is one of the nation's largest financial holding companies. The company operates through an extensive banking network primarily in Ohio, Illinois, Indiana, Kentucky, Michigan, Missouri and Pennsylvania, and also serves customers in selected markets nationally. Its core businesses include commercial and retail banking, mortgage financing and servicing, consumer finance and asset management.
 
* National City Capital Markets is a trade name under which corporate and investment banking services of National City Corp. and its subsidiaries (including NatCity Investments Inc. and National City Bank) are marketed. National City Capital Markets is not a legal entity. Securities products and services are provided by NatCity Investments, Inc., Member FINRA and SIPC, and its licensed securities representatives, who may also be employees of National City Bank. Banking products and services are offered by National City Bank.