BURNHAM - Japanese steel manufacturer Sumitomo Metal Industries Ltd. and Sumitomo Corporation have agreed to acquire Steel Wheels Acquisition Corp., the parent company of Standard Steel LLC in Burnham, according to a press release issued Monday.
The estimated $340 million transaction is expected to close before the end of the year, subject to the receipt of regulatory approvals, the release states.
Standard Steel, a portfolio company of Trimaran Capital Partners, is a leading manufacturer of steel wheels and axles for use in freight railcars, locomotives and passenger railcars. Standard Steel produces steel railroad wheels and axles from its manufacturing facility in Burnham and has approximately 620 employees.
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A Japanese company plans to purchase Standard Steel by year’s end, according to a press release. The company also says it has plans for the Burnham facility.
"Under Trimaran's leadership, we completed several initiatives, including an expansion of our wheel business, that have enabled us to remain competitive in the railcar components market," Standard Steel CEO Michael Farrell said Monday. "We are excited about the opportunities to further grow our business and enhance our relationship with our customers and we look forward to working with our new owners to achieve future success."
Sumitomo Metals' aim is to enhance its global competitiveness in the manufacture and sale of railway wheels, including wheels used for locomotives and passenger trains, as well as high-speed rail, according to the release. The acquisition of Standard Steel is part of Sumitomo's plan to increase its presence in the North American market, and includes bringing its proprietary Sumitomo Inclined Rotary Dishing pressing facility - a rotary forging press for wheels - and its clean steel technology to the Burnham location, the release states.
Sumitomo said in the release that it believes technology transfer and cooperation with Standard Steel will increase its global competitiveness in terms of quality, technology and product line-up.
"We are pleased to have partnered with Standard Steel's management and employees to support an iconic company as it entered into its next phase of growth," said Michael Maelli, Managing Director of Trimaran. "The company is now well-positioned for future expansion and should continue its successful tradition of being a key supplier to one of the country's oldest industries under its new ownership."
Standard Steel's customers include Class I railroads, freight railcar builders, railcar and locomotive maintenance shops, Amtrak, locomotive builders and regional transit authorities, among others. The company, together with its predecessors, was established more than 200 years ago, and its Burnham facility is one of the oldest continuously operating manufacturing facilities in North America.
Trimaran is a private asset management firm, headquartered in New York, with assets under management in excess of $2 billion. Since 1995, Trimaran has completed 61 private equity investments totaling over $1.5 billion of equity capital. Trimaran and certain members of the management team purchased the company in 2006.
Credit Suisse Securities (USA) LLC acted as financial advisor to the company and Skadden, Arps, Slate, Meagher & Flom acted as legal counsel to Trimaran.
