KPS Capital Partners Portfolio Company, HHI Group Holdings, Completes Third Successful Recapitalization in Last Year

Mar 21, 2011, 12:06 ET from KPS Capital Partners, LP

NEW YORK, March 21, 2011 /PRNewswire/ -- KPS Capital Partners, LP ("KPS") announced today that its portfolio company, HHI Group Holdings, LLC ("HHI" or the "Company"), has completed a third successful recapitalization in the last twelve months. HHI raised $425 million of new financing, including a $100 million asset based revolving credit facility and a $325 million term loan. The proceeds of the recapitalization were used to refinance outstanding debt, to fund a $100 million cash distribution to stockholders and to fund the Company's continued growth.

Following the recapitalization, HHI remains conservatively capitalized with the continued support of KPS, its majority stockholder.  KPS and minority stockholders, including MC Capital Inc. (a subsidiary of Mitsubishi Corp.) and HHI management, continue to own 100% of HHI's common stock.

HHI has completed three recapitalizations in less than one year.  HHI completed a $300 million recapitalization on March 31, 2010 and a $30 million upsizing of its term loan on October 1, 2010. The combined proceeds of the three recapitalizations, as well as the Company's strong cash flow, resulted in more than $300 million in cash distributions to stockholders.

The financing was provided by a syndicate of banks and institutional investors with Bank of America Merrill Lynch acting as Sole Lead Arranger on the $100 million asset based revolving credit facility, and Bank of America Merrill Lynch, Goldman Sachs and Credit Suisse acting as Joint Lead Arrangers on the $325 million term loan.

Jenner & Block LLP served as legal counsel to HHI with respect to the recapitalization.

About HHI Group Holdings, LLC

HHI is the largest independent manufacturer of highly-engineered symmetrical and asymmetrical forged parts for various power train and wheel-end applications, a leading manufacturer of wheel bearings, and one of the few manufacturers of engine timing drive systems for the North American automotive industry.  The company operates through its Jernberg Holdings, LLC, Impact Forge Group, LLC, HHI FormTech, LLC, Kyklos Bearing International, LLC ("KBI") and Cloyes Gear and Products, Inc. subsidiaries.  With over 2,700 employees, HHI is headquartered in Royal Oak, Michigan and operates 14 manufacturing facilities located in Arkansas, Illinois, Indiana, Michigan and Ohio.  For more information, please visit

About KPS Capital Partners, LP

KPS Capital Partners, LP is the manager of the KPS Special Situations Funds, a family of private equity funds with over $2.6 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. The KPS investment strategy and portfolio companies are described in detail at the firm's website:

SOURCE KPS Capital Partners, LP