KPS Capital Partners Sells Herr-Voss Stamco Venture
09/11/2007 - KPS Capital Partners sells its jointly owned portfolio company, Genesis Worldwide II, which designs and manufactures processing equipment under the Herr-Voss Stamco brand name.
KPS Capital Partners, LP has sold its portfolio company, Genesis Worldwide II, Inc., which it jointly owned with Pegasus Partners II, LP. Genesis II was sold to HVS Acquisition, Inc., an affiliate of Grey Mountain Partners, LLC.
Genesis II is a leading designer and manufacturer of high-quality metal coil processing equipment under the Herr-Voss Stamco(R) brand name. The company also provides mill roll services, and operates a repair and spare-parts business. Financial terms of the transaction were not disclosed.
The transaction represents the eighth sale of a portfolio company by KPS over the past 15 months. It is also the final sale of a portfolio company by KPS Special Situations Fund, LP and KPS Supplemental Fund, LP, KPS's first institutional private equity funds, which closed in 1998 with capital commitments of $210 million.
"Under our ownership, Genesis II became the leading company in its industry, developed and introduced the most advanced products in the world based on self-developed proprietary new technologies, and achieved recognition as the most recognized and admired brand name in North America,” said KPS Managing Partner Michael Psaros, who has served as Chairman of Genesis's Board of Directors since KPS and Pegasus acquired the company in 2001.
“In addition, the company transitioned from a North American business into a global enterprise, with a substantial portion of its revenues now derived from exports to Asia, and Central and South America. The success of Genesis II is another validation of our investment strategy, and the culmination of a very successful investment campaign for our first fund,” said Psaros.
"We congratulate Walter Stasik, Chief Executive Officer of Genesis II, and the company's management team on their many accomplishments. We thank General Electric Capital Corp. for its strong support of the company and for financing the company's important export business. We also thank the United Steelworkers and the International Association of Machinists and Aerospace Workers (IAM) for their very critical role in making the company a success."
Mr. Stasik added, "At the time of the original purchase transaction, KPS and Pegasus were the only investors that recognized the long-term value of this company. They were prepared to execute a very difficult two-year restructuring and turnaround plan, and their patience and tenacity has been rewarded with this sale, and the prior sale of GFG. We thank KPS and Pegasus for providing us with the resources to achieve our objectives. We are now perfectly positioned to continue our growth, and expect long-term success under Grey Mountain's ownership."
IAM International President Tom Buffenbarger added that members and other employees look forward to working with the new owners to “keep this company going in the right direction."
In November 2005, Genesis II sold its GFG subsidiary to Mitsubishi-Hitachi Metals Machinery, Inc., a joint venture of Mitsubishi Heavy Industries, Ltd. and Hitachi, Ltd. GFG is a leading international designer and manufacturer of roll coating equipment and lines, and electrostatic oilers under the Peabody name. Mitsubishi-Hitachi Metals Machinery was introduced to Genesis II and its GFG subsidiary by Mitsubishi International Corp., an investor in and key strategic partner of KPS.
Lincoln International acted as the financial advisor to Genesis II, and K&L Gates acted as the legal advisor with respect to this transaction.
Headquartered in Callery, Pa., Genesis Worldwide II designs, engineers and manufactures high-quality metal coil processing equipment through its Herr-Voss Stamco business unit. The company also provides mill roll reconditioning, texturing and grinding services in addition to its rebuild, repair and spare parts business. Genesis II operates seven manufacturing facilities located in Pennsylvania, Ohio, Indiana, and California.
KPS Capital Partners, LP is the manager of the KPS Special Situations Funds, a family of private equity funds with over $1.8 billion of committed capital focused on constructive investing in restructurings, turnarounds and other special situations. KPS has created new companies to purchase operating assets out of bankruptcy; established stand-alone entities to operate divested assets; and recapitalized highly leveraged public and private companies. The KPS investment strategy targets companies with strong franchises that are experiencing operating and financial problems. KPS invests its capital concurrently with a turnaround plan predicated on cost reduction, capital investment and capital availability. Typically, the KPS turnaround plan is accompanied by a financial restructuring of the company's liabilities.
