October 5, 2006 -- KPS Special Situations Funds, the private-equity group that in July created a new holding company for a set of forging operations it has acquired recently, is selling a minority equity stake in that company to Mitsubishi Corp. Financial terms were not announced, nor was the percentage of Mitsubishi's interest in the holding company, Hephaestus Holdings Inc.
HHI is KPS's portfolio company that includes Jernberg Holdings Inc. and Impact Forge Group Inc. Its forging operations include Jernberg Industries, Impact Forge, and Omni Forge, which produce engineered forged parts for a variety of industrial customers, including powertrain and wheel-end components. In all, HHI includes eight plants in Chicago, Indianapolis, and Coldwater, MI, and claims to be the largest independent manufacture of forged parts to the North American auto industry.
Michael Psaros, managing principal of KPS, stated: "Mitsubishi is a Limited Partner of the KPS Funds and a key strategic relationship. This is the second transaction involving a KPS portfolio company and Mitsubishi, and its affiliated entities, in the past year. We expect Mitsubishi to add a great deal of value to HHI."
George Thanopoulos, CEO of HHI, said, "While we are committed to our existing domestic customer base and value the longstanding relationships we have enjoyed with our core customers, HHI continues to seek opportunities to diversify its customer base. We expect this relationship with Mitsubishi to contribute to the acceleration of our rapidly expanding business with the New Domestic automotive manufacturers in North America, and to the sourcing of our primary raw materials on a global basis."