N. Sankar-led Sanmar Group, an integrated industrial, shipping and engineering group, has acquired Houston-headquartered Matrix Metals LLC for an undisclosed sum.
Matrix Metals operates one of the largest speciality steel casting businesses in North America. It is a portfolio company of Jefferies Capitol Partners, a private equity investment firm with more than $680 million in funds under management. The deal is expected to result in the creation of a leading specialty steel casting group in the global arena.
Matrix Metals has foundries in Keokuk (Iowa), Richmond (Texas) and San Juan del Rio in Mexico. The three plants together have a combined capacity of 30,000 tonnes a year. Matrix designs and pours castings of all sizes up to 8,500 pounds. It is focussed on meeting the casting needs in the flow control, locomotive, mining, farm equipment, heavy construction and oilfield equipment sectors. It employs around 1,300 people across these three locations. According to a release from the Sanmar group, Matrix Metals closed the last financial year with sales of $157 million, up 10 per cent over 2006.
Following this acquisition, it has been decided to move B. Natraj, a Corporate Director of Sanmar group, to the U.S. to serve as the Executive Vice-Chairman of Matrix Metals. “Our first priority will be to reinforce Matrix’s sales and the marketing efforts in the U.S. and underscore our ability to serve a broader range of global customers’ casting requirements,” a release quoted Mr. Natraj as saying.
“Combining Sanmar’s expanding foundry capacity with ours will enable us to meet almost any North American customer’s casting requirements and create new business opportunities across the combined companies,” the release quoted Roger Courtney, CEO of Matrix and President of Keokuk factory, as saying.
Matrix and the Sanmar group have a close relationship. NEPCO, a unit of Matrix, has been sourcing castings from the Sanmar group for several years now for many of its clients. “The latest transaction is the culmination of the trust each has for the other,” sources said.
The overseas acquisition comes at a time when the Sanmar Group is in the midst of a capital expenditure programme in India. Currently, the Chennai group is investing over $26 million to further expand the capacity of the steel foundry from 10,000 tonnes to 30,000 tonnes a year by adding three automated lines for sand castings. “The Sanmar steel foundry also includes an investment foundry in India with a capacity of 1,200 tonnes and a state-of-the-art machine shop,” the release said.
The group made its first overseas buy in 2007 when it acquired a German firm. “This, together with a greenfield site in Chennai for iron alloy castings, will offer automotive customers a choice of simple and complex iron castings to meet their varied needs,” the release said. The acquisition had been funded by a bridge facility from Bank of India and SBI.
Source: The Hindu