Oak Hill Capital to buy Firth Rixson for $2 billion

Oak Hill will buy Firth Rixson from investment funds managed by private equity firm The Carlyle Group and Lehman Brothers.

Firth Rixson, headquartered in East Hartford, Connecticut, and Sheffield, England, supplies highly engineered products to aerospace and industrial customers from facilities in the United States, Britain, Hungary and China.

Carlyle agreed to acquire the company in 2002 in a deal that valued Firth Rixson at about 105 million pounds. Firth Rixson subsequently merged with Forged Metals, Inc, a Carlyle portfolio company, and then bought Schlosser Forge Company in 2004.

In 2006 Lehman Brothers acquired a 36 percent interest in Firth Rixson, with Carlyle remaining the lead investor.

"We supplemented the existing management team with talented leaders like (former CEO) Armand Lauzon and (current CEO) David Mortimer," said Carlyle Managing Director Bud Watts. "They in turn took a set of independent companies and integrated them into a cohesive, world class business. Management also made strategically significant investments in additional capabilities and increased geographic reach."

Particularly important was the company's expansion into China, Watts added.

Firth Rixson generates annual revenue of about $1 billion.

Oak Hill said Firth Rixson's management team will remain significant investors in the company. The deal is expected to close in December.

Financing for the transaction is being provided by Lehman Brothers, GE Commercial Finance and Lloyds TSB Corporate Markets. Carlyle was advised by Lehman Brothers and Latham & Watkins.

(Reporting by Jonathan Keehner and Franklin Paul)