Sanmar Group acquires Matrix Metals
City-based industrial shipping and engineering firm Sanmar Group announced that it has acquired the US-based Matrix Metal LLC, a manufacturing, sourcing and distribution metal casting company, for an undisclosed sum on 1st April,2008. The deal is said to be the culmination of the Rs.15.96 billion ($398 million) turnover Sanmar’s business relationship with one of Matrix Metal’s units that sourced casting from the Indian firm.
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 reportedly have a combined capacity of 30,000 tonne 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.
Roger Courtney, CEO of Matrix and President of Keokuk factory, said, “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”.
Matrix and the Sanmar Group have a very close relationship. NEPCO unit of Matrix has been sourcing castings from the Sanmar Group for several years now for many of its clients. The overseas acquisition comes at a time when the Sanmar Group is 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 in India from 10,000 tonnes to 30,000 tonnes a year by adding three automated lines for sand castings.
According to Sanmar officials, the purchase transaction is funded with bridge loan from Bank of India and State Bank of India. The $157 million turnover Matrix Metals has over 1,300 employees and operates one of the largest casting units in North America. Sanmar’s corporate director B. Natraj, based in the US, would look after Matrix Metals.
Tags: Matrix Metals, Sanmar Group, SBI, steel casting