Premier Manufacturer Of High Performance Automotive Wheels Is Envisioned As Platform for Additional Acquisitions
BEVERLY HILLS, Calif. (July 21, 2005) – Platinum Equity announced today that it has acquired American Racing Equipment Inc., a leading manufacturer of high-performance automotive wheels to aftermarket customers in North America, from Noranda Aluminum Inc.
Based in Southern California with a heritage dating back 50 years, American Racing Equipment is an industry pioneer that employs 1,400 people in manufacturing operations in Los Angeles and in Tijuana, Mexico, as well as in 44 distribution centers across the United States and Canada.
“American Racing has a rich heritage and one of the industry’s premier brand names for high performance, custom automotive wheels,” said Johnny O. Lopez, executive vice president for mergers and acquisitions at Platinum. “We are very pleased with the opportunity to acquire this company and help it grow in the future.”
Robert J. Wentworth, executive vice president for M&A Finance at Platinum Equity, said the firm sees significant potential for American Racing not only as a standalone company, but as a potential platform for add-on acquisitions.
“The management team at ARE has done a terrific job in establishing market share and brand awareness by delivering high quality products through a well-established distribution network,” Mr. Wentworth said. “We are very confident we can help them accelerate growth by identifying and executing additional acquisitions.”
The business was acquired from Noranda Aluminum Inc., a wholly owned subsidiary of Falconbridge Limited (NYSE: FAL), a Toronto-based copper and nickel mining company, which recently merged with Noranda Aluminum’s former parent Noranda Inc.
Falconbridge designated American Racing as a non-core business unit and divested the business in order to focus on its core mining and metals operation. Bill Brooks, president of Noranda Aluminum Inc., said the divestiture was made to “allow the wheels business to move forward under new ownership.”
Mr. Lopez, who spearheaded the transaction for Platinum, said all parties benefited.
“This transaction represents a great opportunity for American Racing and for Platinum Equity, and it’s also very beneficial for Falconbridge,” Mr. Lopez said. “We take great pride in partnering with large companies that are restructuring through the divestiture of non-core assets. This is an example of that approach in action.”
Agreement on the sale was reached on July 18. A transition team from Platinum is already in place at American Racing, working with the management team to transition the company.
Founded in 1956 by Romeo Palamides, an early drag racing innovator, American Racing Equipment is today one of the leading producers of lightweight, high performance aftermarket wheels under the American Racing brand (American Racing Vintage, American Racing Pro Series, American Racing Muscle) as well as related brand lines including Twenty Inches Strong, Motegi Racing, Motto, Riax Performance Alloys, and RO-JA Motorsports. The company virtually launched the custom wheels craze in the early 1960s with the introduction of its five-spoke “Torq Thrust” wheel, considered by many aficionados to be the most famous custom wheel of all time.
Today, as American Racing approaches its 50th anniversary, the company produces a wide-ranging line of more than 100 precision crafted alloy wheel styles. From state-of-the-art manufacturing facilities, the company distributes more than 1.5 million wheels annually through company-owned, satellite-connected warehouses, an independent distributor system in the United States and through international distributors in over thirty-five countries on four continents. American Racing also continues to offer the latest generation of the original, authentic Torq Thrust for the discriminating enthusiast.
Further information about the company is available at www.americanracing.com.
About Platinum Equity
Platinum Equity (www.platinumequity.com) is a global M&A&O® firm specialized in the merger, acquisition and operation of companies that provide services and solutions to customers in a broad range of business markets, including information technology, software, telecommunications, logistics, manufacturing, health care products and entertainment distribution. Since its founding in 1995 by entrepreneur Tom Gores, Platinum Equity has acquired more than 50 businesses and built a portfolio of operating companies that today has more than 40,000 employees, more than 600,000 customer sites and aggregate annual revenue of approximately $8 billion. In 2004, Platinum was named the 32nd largest private company in the United Stated by Forbes magazine.
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