Form Technologies Acquired by Ares Management
Rhea-AI Summary
Form Technologies, a global leader in precision-engineered components, announced its acquisition by Ares Management funds. The transaction includes approximately $304 million in new equity capital, consisting of $154 million in common equity from investors including Ares, D. E. Shaw group and Onex Credit, plus $150 million in preferred equity from D. E. Shaw group and Ripple Industries.
The company operates 32 facilities across 22 countries, specializing in die casting, investment casting, and metal injection molding. Form Technologies serves nearly 2,000 customers across automotive, aerospace, healthcare, and enterprise technology sectors. The new capital will support investment in operational capabilities and accelerate commercial strategy, following a platform-wide strategic repositioning over the past two years.
Positive
- Secured $304 million in new equity capital for growth and deleveraging
- Substantial balance sheet deleveraging achieved through the transaction
- Strong market presence with 32 facilities across 22 countries
- Diverse customer base of 2,000 organizations across multiple sectors
- Strategic repositioning completed, strengthening market position
Negative
- None.
Insights
Ares Management's strategic acquisition of Form Technologies marks a compelling expansion in the industrial manufacturing sector, bringing significant implications for both entities. The
The transaction's structure is particularly noteworthy for three key reasons:
- The deleveraging component strengthens Form Technologies' balance sheet, potentially improving its credit profile and reducing interest expenses
- The involvement of multiple sophisticated investors suggests strong confidence in the company's growth trajectory
- The mix of common and preferred equity provides financial flexibility while maintaining strategic control
Form Technologies' market position is robust, with its 32 facilities across 22 countries enabling efficient global production and distribution. The company's focus on precision-engineered components serves high-growth sectors including automotive (particularly relevant for EV transition), aerospace (amid recovery and modernization trends) and healthcare (driven by aging demographics and technological advancement).
For Ares Management (ARES), this acquisition aligns with their strategy of investing in market-leading industrial companies with strong operational capabilities and growth potential. The transaction should contribute positively to Ares' assets under management and potentially generate attractive returns through both operational improvements and strategic growth initiatives.
Form Technologies' manufacturing capabilities represent a strategic advantage in the precision engineering sector, particularly through its integrated approach to three critical processes: die casting, investment casting and metal injection molding. This diversification is important as different industries require varying levels of precision and cost-effectiveness.
The company's recent operational enhancements are particularly timely given current industry trends:
- Increasing demand for high-precision components in electric vehicles and advanced aerospace applications
- Growing need for complex medical device components amid healthcare technology advancement
- Rising requirements for sophisticated enterprise technology hardware components
The expansion of their customer base to nearly 2,000 organizations indicates strong market penetration and validates their solutions-based approach. Their global manufacturing footprint provides significant competitive advantages:
- Ability to serve customers locally, reducing supply chain complexities
- Diversification of manufacturing risks across regions
- Capacity to leverage regional cost advantages while maintaining quality standards
With Ares' backing and the new capital injection, Form Technologies is well-positioned to further enhance its operational capabilities and potentially capture additional market share in high-growth segments.
With a robust global footprint of 32 facilities across 22 countries, Form Technologies has built strong commercial momentum through its ability to offer diversified casting services at scale, with key competencies in die casting, investment casting and metal injection molding. In recent years, the Company has invested significantly in its proprietary processes and engineering capabilities to support product design and manufacturing with a higher level of precision for its customers. Form Technologies has also implemented important enhancements to its commercial organization in that time and has accelerated the success of new customer programs, increasing the Company's customer count to nearly 2,000 organizations across key end markets, including automotive, aerospace, healthcare and enterprise technology.
"Over the past two years, we have undertaken a platform-wide strategic repositioning that has solidified Form Technologies as a global leader in precision-engineered parts," said David Angell, Chief Executive Officer of Form Technologies. "I am very proud of the work our team has done to deliver on our operational objectives while continuing to meet our customers' needs. We are excited to move forward with additional strategic support from Ares as we seek to build on our commercial momentum, expand our presence in key regions and drive long-term growth."
"Since our initial investment in 2021, we have observed the acceleration of Form Technologies' commercial success through its differentiated solutions-based offering and engineering excellence," said Aaron Rosen, Partner and Co-Head of Opportunistic Credit at Ares Management. "We believe that under David's leadership, Form Technologies is well-positioned to address the growing needs of its diversified customer base across key regions and sectors. We look forward to the exciting opportunities ahead as we support the team's goals for driving revenue growth and value creation."
Jefferies LLC served as financial advisor and Kirkland & Ellis LLP served as legal counsel to the Company. Evercore served as financial advisor and Paul, Weiss, Rifkind, Wharton & Garrison LLP served as legal counsel to Ares.
About Form Technologies
Form Technologies is a leading global producer of precision-engineered components with complex geometries and tight tolerances. Utilizing proprietary processes and engineering expertise, the company manufactures over five billion high-precision components annually, serving diverse end markets worldwide. With 32 manufacturing facilities across 22 countries, and a global team of over 7,500 employees, Form Technologies provides customized solutions to meet its customers' most demanding challenges.
About Ares Management Corporation
Ares Management Corporation (NYSE: ARES) is a leading global alternative investment manager offering clients complementary primary and secondary investment solutions across the credit, real estate, private equity and infrastructure asset classes. We seek to provide flexible capital to support businesses and create value for our stakeholders and within our communities. By collaborating across our investment groups, we aim to generate consistent and attractive investment returns throughout market cycles. As of September 30, 2024, Ares Management Corporation's global platform had approximately
Forward-Looking Statements
The Company has included statements in this press release that constitute "forward-looking statements." As a general matter, forward looking statements are those focused on future or anticipated events or trends, expectations and beliefs including, among other things, the Company's expectations with respect to its business, strategic plans, investments, including investments in its operational capabilities, and its financial condition. Such statements are intended to be identified by using words such as "believe," "expect," "intend," "estimate," "anticipate," "will," "plan" and similar expressions in connection with any discussion of future operating or financial performance. Not all forward-looking statements in this press release may contain one or more of these identifying terms. Several factors could cause actual results to differ materially from those contained in any forward-looking statement, such as factors related to our ability to execute our strategic plans, to realize benefits from our investments in our operational capabilities and to service or refinance our indebtedness. Any forward-looking statements are and will be based upon the Company's then-current expectations, estimates and assumptions regarding future events and are applicable only as of the dates of such statements, and the Company undertakes no obligation to update them. Readers are cautioned not to rely on such forward-looking statements.
Contacts
Form Technologies
marketingformtechnologies@formtechnologies.com
Ares Management
Jacob Silber, +1-212-301-0376
Brennan O'Toole, +1-212-301-0391
media@aresmgmt.com
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SOURCE Form Technologies, Inc.
FAQ
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