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| PRESS NOTE |
| 1 st April 2008 |
| SANMAR'S US ACQUISITION |
| Matrix Metals LLC, a portfolio company of Jefferies Capital Partners, announced in New York on 31.3.2008, that it has been acquired by The Sanmar Group, an integrated industrial, shipping and engineering group headquartered in Chennai, India. This transaction is the culmination of a close relationship between Sanmar and Matrix’s NEPCO unit, which has sourced castings from Sanmar for many of Matrix’s most important customers for several years. Faced with contracting foundry capacity in North America and growing demand for products featuring high quality castings, customers have for some time encouraged Matrix and Sanmar to expand and better integrate their activities. |
| “We are convinced that Matrix joining with Sanmar will create one of the leading specialty steel casting groups in the world,” said Roger Courtney, CEO of Matrix and President of the Keokuk Foundry. “Combining Sanmar’s expanding foundry capacity with ours will enable us to meet almost any North American customer’s casting requirement and create new business opportunities across the combined companies.” |
| “Sanmar's foundry division is finalizing a very significant capital program in India,” added B Natraj, a Sanmar Group Corporate Director who is relocating to the US and will serve as Matrix's Executive Vice Chairman. “Our first priority will be to reinforce Matrix's sales and marketing efforts in the US and underscore our ability to serve a broader range of global customer casting requirements. We intend to supplement Matrix's established foundries in Keokuk, Houston and Mexico with our expanded operations in India to meet those needs.” |
Matrix Metals operates one of the largest speciality steel casting businesses in North America, with foundries in Keokuk, Iowa, Richmond, Texas and San Juan del Rio, Mexico. Matrix designs and pours castings of all sizes up to 8,500 pounds and focuses on specialty casting requirements in the flow control, locomotive, mining, farm equipment, heavy construction and oilfield equipment sectors. |
| Sanmar entered the foundry segment over a decade ago, expanding its steel castings capacity in southern India from 150 tons a month to over 850 tons by 2005. Sanmar is currently investing over $26 million to further expand the capacity of the steel foundry in India from 10,000 tons to 30,000 tons per year by adding three automated lines for sand castings. The Sanmar steel foundry business also includes an investment foundry in India with a capacity of 1,200 tons and a state of the art machine shop. |
| Sanmar’s first foreign foundry acquisition was Eisenwerk Erla GmbH, a German producer of high-end alloy castings used in the manufacture of turbo charger housings, in 2007. This, together with a green field site in Chennai for iron alloy castings, will offer its major automotive customers a choice of simple and complex iron castings to meet their varied needs. |
| “The combination of world class steel and iron foundries across three continents places The Sanmar Group in a pre-eminent position,” said P Natarajan, the Managing Director of Sanmar’s global Metals business. “We now offer 60,000 tons per annum of steel casting capacity and 50,000 tons per annum of premium iron alloy casting capacity to our customers around the world.” |
| The acquisition has been funded by a bridge facility provided by Bank of India, New York. State Bank of India, New York is expected to be the long term provider of funds. B Natraj remarked "Sanmar is grateful to these leading Indian banks for enabling the transaction with their whole hearted support, notwithstanding the current situation in the global financial markets". |
| Matrix Metals closed the last financial year with sales of $ 157 m, up 10% over 2006. It employs nearly 1,300 employees in its three locations. |
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