Citation Selling Custom Forging Operation

Private-equity group says Texas plant has "great fundamental value"

January 5, 2007 — Citation Corp. is selling its Navasota, TX, custom forging division to a private-equity group for an undisclosed price. Balmoral Advisors, based in Los Angeles, apparently will keep the plant operating while Citation indicates it will "focus more resources on its machining and casting operations," according to a company release.

“This is a good move for Citation and for our Navasota employees,” stated Citation president Ed Buker. “Forgings make up less than 10% of our sales, and as we adjust to our strengths, it makes less sense to operate the Navasota facility. The sale also helps us as we continue to reduce our debt.”

Birmingham-based Citation emerged from bankruptcy in May 2005 and since then it has been focused on its core metalcasting and machining operations. It produces castings for automotive, heavy-truck, construction, agricultural, and commercial and other markets. One of its foundries, at Grand Rapids, MI, is being expanded, but two others (Lake Zurich, IL, and Bay Minette, AL) have been scheduled for closing.

Citation acquired Navasota in 1996 through its purchase of Interstate Southwest Forgings Inc. The 400-employee plant produces forged steel products for construction, light automotive, aerospace, and medium- and heavy-truck applications. Among its products are draw bars, end bits, landing gears, ripper shanks, steering knuckles/arms, tension struts, turbine blades and valve bodies.

Balmoral Advisors describes itself as an investor in recapitalizations, special situations, and acquisitions of small and middle-market companies with revenues ranging from $25 million to $500 million. Typically, its investments are in companies "experiencing financial distress (or) undergoing or in need of an operational turnaround."

Balmoral managing director Jonathan Victor stated, “This company has great fundamental value with a solid management team led by George Thomas. In the seven months since George came to Navasota, he has already made significant operational improvements to the business.”

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