MY BIGGEST DEAL A $310M reconciliation for Wellspring and JW Aluminum

Aug 01, 2007 | 06:25 AM |

Wellspring Capital Management LLC is already looking to the future after re-acquiring JW Aluminum Co. But this time around, the future involves acquisitions rather than another divestiture.

Back in 2003, Wellspring purchased JW Aluminum from Walter Industries Inc. for $125 million. Three years later, it sold JW to Superior Plus Inc., Calgary, Alberta, for $350 million.

William F. Dawson Jr., a partner at Wellspring, said it was both the opportunity to make a handsome profit combined with the fact that Wellspring at the time was drawing on a smaller investment fund and did not have the capital to expand the business.

Fate brought them back together, however. At the end of 2006, Wellspring had a much larger warchest that could provide the capital needed to expand JW Aluminum just as Superior was experiencing liquidity problems. "The timing was purely coincidental," Dawson said. Wellspring got JW back for $310 million.

Now, Wellspring has shifted to bulking up JW Aluminum. "Absolutely," Dawson said when asked if he expects Wellspring and JW to acquire further aluminum assets. "We feel there will be significant consolidation opportunities for downstream assets going forward."....