Thursday, April 07, 2005

One of Simpson County’s largest employers, Outokumpu Copper of Franklin, has been acquired along with other sister operations by the Nordic private equity firm, Nordic Capital of Sweden.

The announcement was made Tuesday. The Franklin Outokumpu Copper plant employees about 310 at its 225,000-square-foot facility on U.S. 31-W north. It basically manufactures copper tubing for the air conditioning and refrigeration industries.

Neither of the announcements of taking the company private that were distributed to the employees or to the stock exchange indicated immediate changes to employment or physical plants. However, the notification of the acquisition to Outokumpu’s workforce said employees, sales personnel and management teams will continue to serve under existing terms and conditions.

“Nordic Capital has a strong and proven track record in owning and developing industrial companies since 1989,” said the release to local employees from Outokumpu Copper management. “Nordic Capital will provide Outokumpu Copper the platform where it can develop and grow to meet the challenges your businesses will face in the future.”

“Franklin is extremely excited about the prospects to further grow our business under our new owners, Nordic Capital, and working with them to reach our goal of being a world class copper tube supplier,” said Franklin plant President and General Manager Ronald C. Beal.

Outokumpu’s fabricated copper products division has been on the selling block for about six months. Since selling its copper mines and outlining its strategic direction to focus on leadership in stainless steel last August, Outokumpu has studied various alternatives to divest its copper business.

Nordic Capital plans on acquiring Outokumpu’s Americas, Europe, Automotive Heat Exchangers, Appliance Heat Exchanger & Asia and the forming equipment businesses. The 2004 sales of the sold businesses were some EUR 1.7 billion, and the number of employees was 6,400 at the end of the year.

Outokumpu Copper will continue its business under its present name during the transition period, which could take up to one year. Closing of the transaction is expected in June 2005.

“Under the new ownership, Outokumpu Copper will continue its strong industrial approach of focusing on competitiveness and new product offerings,” employees were told by existing management. “It will also give Outokumpu Copper great potential to further strengthen its capabilities and services in the marketplace and to develop the company where copper is the core business.”

The Franklin copper tube plant launched operations in 1970. Initially known as Anaconda and later as American Brass, it has undergone two other acquisitions. Outokumpu Oyj, which is based in Helsinki, Finland, purchased it in 1990.

Outokumpu Copper of Franklin completed a $6 million expansion that added 65,000 square feet in 2002. The additions made way for two new lines for manufacturing and research/development as well as created more space for shipping and handling.

Nordic Capital has made several major acquisitions this year and now has invested in more than 60 middle-market companies.