Released on December 23, 2009

Grede Foundries Inc., Milwaukee, will be combined with Citation Corp., Novi, Mich., during the first quarter of 2010 to form a new company operating under the Grede name.

“We are taking the best of the best in people, assets and technology [from both companies],” said Citation President and Chief Executive Officer Doug Grimm, who has been tapped to lead the merged companies.

The announcement of the business consolidation comes a day after the sale of Grede to Wayzata Investment Partners LLC, Wayzata, Minn., was approved by the U.S. Bankruptcy Court. Chris Keenan of Wayzata informed Grede suppliers of the merger in a letter dated Dec. 23.

“We believe this transaction, which will be facilitated by significant equity investment from Wayzata and Citation’s largest shareholder, GSC Group, will create the most diversified [metalcasting] group in North America,” Keenan wrote. “Wayzata will be the controlling shareholder of the new company, which will operate as Grede.”

The Grede businesses that will be included in the new company are its Liberty Foundry (Milwaukee), Iron Mountain Foundry (Kingsford, Mich.), St. Cloud Foundry (St. Cloud, Minn.), Reedsburg Foundry (Reedsburg, Wis.), New Castle Foundry (New Castle, Ind.) and Wichita Foundry (Wichita, Kan.). The deal does not include the company’s Greenwood, S.C., and Vassar, Mich., plants. The Greenwood plant has been closed for several months, and the Vassar facility was sold to Revstone Industries, Lexington, Ky.

Citation sold its aluminum diecasting and machining operations in March and closed two primarily automotive plants, one in Butler, Ind., and the other in Lufkin, Texas, since undergoing a recapitalization in March 2007. However, the company still operates eight metalcasting plants.

“Both companies have already done quite a bit of restructuring,” Grimm said. “Grede has done it through bankruptcy, and Citation has done it [outside of bankruptcy].”

The newly formed metalcasting giant will maintain 14 plants with nearly 600,000 tons of iron casting capability. In his letter, Keenan estimated the company’s future annual revenues at $575 million.

“Hopefully, no more [consolidation] is needed, but that is going to depend on sales volumes,” Grimm said. “Volumes and utilization will continue to be an ongoing review, but at this point, the goal is to maintain the current footprint.”