SSG advises Hussey Copper Ltd. in the sale of its assets to an affiliate of Patriarch Partners, LLC
We are pleased to inform you that SSG Capital Advisors, LLC (“SSG”) acted as the exclusive investment banker to Hussey Copper Ltd. (“Hussey” or the “Company”) in the sale of substantially all of its assets to an affiliate of Patriarch Partners, LLC (“Patriarch”). The transaction closed in mid December 2011.
Founded in 1848, Hussey is one of the leading manufacturers of copper products in the United States. With a fully integrated mill, the Company provides a wide range of flat rolled copper products for the electrical distribution, industrial and residential construction markets. Through its locations in Leetsdale, PA and Eminence, KY, Hussey is vertically integrated to capitalize on the trend towards outsourced fabrication. As a fully integrated producer, Hussey manufactures its products from melting and casting its copper to providing the finished product or component part. Hussey produces a wide range of copper and, to a lesser extent, copper-nickel products. The Company has pursued a strategy of focusing on bar, strip, sheet and plate products where it has a significant market share. Principally, copper bar is used by electrical equipment manufacturers and contractors to carry heavy electrical currents in industrial plants, commercial buildings and in switchgear.
Although Hussey had a history of strong revenue growth and positive EBITDA, the global economic downturn had a significant impact on the copper industry and the Company’s financial performance. Reduced corporate capital spending led to a decreased demand for its products during 2009 and 2010. Although the Company experienced improved performance at the beginning of 2011, liquidity constraints coupled with recent copper price volatility limited the Company’s ability to purchase inventory and severely constrained operations. Hussey engaged SSG in April 2011 to explore a sale of substantially all of the Company’s assets. SSG marketed the Company to a wide range of strategic and financial parties and received multiple offers for the Company. An acquisition entity of Kataman Metals was chosen as the stalking horse bidder at $84.7 million. The Company filed Chapter 11 in September 2011. SSG remarketed Hussey over seven weeks and had a mini auction over two days at the bid procedures hearing, resulting in a better stalking horse offer from Kataman plus additional consideration and without a breakup fee. By the bid deadline four qualifying overbids were received, which resulted in a robust Section 363 auction with Patriarch emerging as the winning bidder for a price approximately 27% higher than the original stalking horse bid. The gross purchase price of $107.75 million, subject to a working capital adjustment, was sufficient to pay secured debt in full and provide a sizeable fund for distribution to the unsecured creditors.
Patriarch Partners, LLC, is a private equity firm and holding company managing 76 companies with annual revenues of more than $8 billion. Founded by Wall Street veteran Lynn Tilton in 2000, Patriarch is dedicated to saving American manufacturing jobs by saving companies that have fallen from economic favor. Since its inception, Patriarch, through its managed funds, has bought more than 150 companies, and in so doing has saved over 250,000 jobs.
Other professionals who worked on the transaction include:
- Jeffrey C. Hampton, Mark Minuti, Adam H. Isenberg, Richard D. Leigh, Robyn F. Pollack and Monique A. Bair of Saul Ewing LLP, counsel to Hussey;
- Dalton T. Edgecomb (now of Winter Harber LLC), John Owens and Brett M. Anderson of Huron Consulting Group Inc, restructuring advisor to Hussey;
- Lawrence F. Flick, II, Regina Stango Kelbon, Michael C. Graziano and Heather Sonnenberg of Blank Rome LLP, counsel to the Senior Lender Syndicate;
- Sharon L. Levine, Wojciech F. Jung and Lowell A. Citron of Lowenstein Sandler PC, counsel to the Unsecured Creditors Committee;
- Conor P. Tully, Michael J. Talarico and Andrew Bekker of FTI Consulting, Inc., financial advisor to the Unsecured Creditors Committee; and
- Gregory M. Gordon, Carl E. Black and Steven D. Stennett of Jones Day, counsel to Patriarch.
About SSG Capital Advisors, LLC
SSG Capital Advisors, LLC (“SSG”) is a leading independent boutique investment bank that assists middle market companies, as well as their stakeholders, complete special situation transactions. As a specialist in mergers and acquisitions, financial advisory, capital raises, financial restructurings and complex valuations, we offer the expertise our clients need in today’s complex and fast-moving financial markets. As a partner-owned firm with a clear focus, we offer the personal attention of our senior partners, entrepreneurial spirit, and agility in the marketplace that middle-market businesses require. Since 2001, SSG has successfully completed over 180 special situation investment banking assignments on behalf of clients in North America and Europe.