Castle Harlan makes 3x on quick exit

The middle market investor has sold its stake in AmeriCast Technologies to minority investor Bradken, formerly a portfolio company of Castle Harlan’s Australian affiliate CHAMP.

New York-based private equity firm Castle Harlan has sold portfolio company AmeriCast Technologies for $288 million (€185.5 million), more than double its purchase price, to Bradken after only 21 months of ownership.

The transaction is expected to close next week.

Bradken, an Australian steel products manufacturer formerly owned by Castle Harlan’s Australian affiliate CHAMP Private Equity, had purchased a 19 percent equity stake in Kansas-based AmeriCast at the time of Castle Harlan’s initial investment.

Private equity investor KPS Special Situations Funds sold the steel casing manufacturer to Castle Harlan for $110 million in late 2006. In addition to Bradken, AmeriCast’s management also took part in the transaction.

Annual EBITDA grew more than 100 percent over the life of the investment through organic growth and acquisitions, according to Castle Harlan. The company’s 2008 revenues are expected to top $340 million, whereas 2006 revenues were less than $200 million.

Both Castle Harlan and AmeriCast’s management will realise a gain of more than three times their invested capital representing an internal rate of return of more than 90 percent.

Castle Harlan takes controlling interests in middle-market companies in North America, Europe and, together with CHAMP, in Australia and Asia.

The firm’s investment in AmeriCast was made through Castle Harlan’s fourth and most recent fund, which closed on $1.2 billion in August 2003.

Current portfolio companies include books and entertainment distributer Baker & Taylor, malt producer United Malt Holdings and drilling fluid provider Anchor Drilling Fluids USA.

The combined funds under the management of Castle Harlan and CHAMP total more than $4.5 billion in committed capital.