Minining firm Bradken to acquire AmeriCast from PE firm Castle Harlan

30 July 2008

Mining industry equipment and services provider Bradken has enterd in to an deal to acquire the 83-per cent stake that it does not already own in US company AmeriCast Technologies from private equity firm Castle Harlan and the AmeriCast managemnt for $114 million to strengthen its presence in the the resources sector.

Bradken will fund the acquidition almost entirely from a $110-million share placement underwritten and sole managed by Goldman Sachs JBWere. The total transaction costs are estimated at $5 million.
The acquisition will significantly expand Bradken's capabilities in large steel castings and provide an American base from which to expand some of Bradken's mining consumable products.

Based on the value of this transaction, Castle Harlan and the AmeriCast management will make collective gain of more than three times on their original invested capital, which represents an IRR of more than 90 per cent, Howard Morgan, a senior managing director at Castle Harlan who leads the firm's AmeriCast team, said.

Morgan said, "AmeriCast has been an excellent investment for Castle Harlan and its limited partners, and we are pleased that we have been able to add significant value to the company during our 21-month period of ownership. Annual EBITDA has grown more than 100 per cent through both organic growth and strategic acquisitions. We're confident this growth will continue."

The transaction has received Hart-Scott-Rodino Act governmental approval and is expected to close in the next week. The Company's 11 per cent Notes Due 2014 will remain outstanding after completion of the transaction, in accordance with the terms of the indenture governing the notes.

Bradken had purchased a 19 per cent minority equity interest in AmeriCast when Castle Harlan acquired a controlling stake in the company in November 2006. Until it went public in August 2004, Bradken had been a portfolio company of Castle Harlan's Australian affiliate CHAMP Private Equity in Sydney. Bradken is based in Newcastle, New South Wales, about 90 miles north of Sydney. Bradken currently has revenues of approximately $800 million.