Hephaestus Holdings looks to buy the auto parts maker’s powertrain assets while Revstone looks to capitalize on chassis operations buy.

By JONATHAN MARINO

July 28, 2009

A pair of private equity firms are vying for separate parts of Metaldyne Corp. assets; Hephaestus Holdings, a KPS Capital company, and Revstone will look to buy much of the bankrupt auto parts maker’s chassis business.

The automotive sector, virtually across the board, wears tire tracks on its back after being especially hard hit during the recession. GM’s and Chrysler’s respective bankruptcies set off a chain of events affecting companies serving them from parts makers to GPS trackers.

Revstone has been making distressed acquisitions lately; earlier this year, it bought six plants from bankrupt auto parts maker Contech.

Hephaestus was approved as a stalking horse bidder for powertrain assets by a New York bankruptcy court and Revstone was approved to make the chassis operations bid; auctions will commence August 5 with bids due two days earlier.

Hephaestus wants to buy Metaldyne’s sintered products, European forgings and vibration controls products operations located in Europe, Asia, Brazil, Mexico and America. A Hephaestus affiliate looks to buy Metaldyne’s Bluffton, Ind.; Litchfield, Mich., and, subject to certain conditions, the Twinsburg, Ohio, plant. KPS Capital Partners will provide Hephaestus with a significant, yet unspecified, cash investment to support letters of credit and working capital.

Separately, Revstone is bidding on the purchase of Metaldyne’s chassis operations in Edon, Ohio; Greensboro, N.C.; Barcelona, Spain, and Iztapalapa, Mexico. The auction date for that segment will be August 3, with bids due July 31.

Revstone and Hephaestus are not the only two bidders for Metaldyne’s parts, however. RHJ International initially submitted a bid, which was trumped by Hephaestus, and a Carlyle bid was beat by Revstone. Calls were not returned by press time.

Metaldyne had 2008 revenue of $1.57 billion.

Metaldyne’s Balance Shaft Module and Tubular businesses are being marketed by the investment banking firm Donnelly Penman & Partners. Metaldyne’s Powertrain and Chassis operations are being marketed by Lazard.

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