NEW YORK, April 30, 2007 - Castle Harlan, Inc., and DLJ Merchant Banking Partners (DLJ) announced today that they have signed a definitive agreement under which Castle Harlan will sell RathGibson, Inc., a leading manufacturer of highly engineered premium stainless steel and alloy welded tubing products, to DLJ in a transaction valued at $440 million.
Castle Harlan had purchased RathGibson, based in Janesville, Wisconsin, in February 2006, for approximately $260 million. In August last year, RathGibson acquired a complementary tubing manufacturer, Greenville Tube Company, for $37 million. The combined companies had total revenues of $311 million for the fiscal year ending January 31, 2007.
William Pruellage, a managing director who led the Castle Harlan negotiating team, noted that RathGibson's revenues have increased by approximately 50 percent during the time Castle Harlan has owned the company. During that same period, the total number of employees has grown from 335 to 550.
"RathGibson has been a very successful investment for Castle Harlan,"Pruellage said, "and the company is strong and poised for significant growth in both its domestic and international markets.
"The company has a superb management team and a highly talented employee base led by Harley Kaplan, president and chief executive. We believe it has a very promising future with DLJ Merchant Banking."
Pruellage said he expected the transaction to close by the end of the second quarter, 2007.
RathGibson makes a variety of straight and coiled welded stainless steel and specialty alloy tubing products and has a leading share in a number of niche markets. Its primary end markets include the chemical and petrochemical, energy, food and beverage and pharmaceutical industries.
RathGibson has manufacturing facilities in Janesville, Wisconsin, North Branch, New Jersey, and Clarksville, Arkansas.
Castle Harlan, founded in 1987, invests in controlling interests in the buyout and development of middle-market companies in North America and Europe. Its team of 19 investment professionals has completed 48 acquisitions since its inception with a total value of $9 billion. The firm traces its roots to the start of the institutionalized private-equity business in the late 1960s.
Castle Harlan's current portfolio companies, which employ more than 42,000 people, include Ames True Temper, a leading manufacturer of lawn and garden tools and accessories; Baker & Taylor, the world's largest book wholesaler, and Perkins & Marie Callender's, Inc., which operates and franchises 615 family restaurants in the United States and Canada.