A Michigan-based private equity group has acquired Wellman Dynamics, a Creston, IA, nonferrous foundry casting large and complex magnesium and aluminum parts for defense and aerospace manufacturers. The value of the July 29 sale was not announced.
The buyer, TRM Equity, is the same group that acquired Elyria Foundry, Elyria, OH, in March 2021.
"Due to Wellman's unique capabilities and status as a critical supplier, the customer base has been very supportive during the last few years in a challenging environment,” commented Jeffrey Stone, managing director of TRM Equity II. “Very significant investments have been made to modernize the facility and to support new defense programs since 2018.
“We are excited to have the opportunity to bring our foundry experience to the business,” Stone added.
Following the sale, the buyer settled pending federal charges against the foundry for failing to conduct contractually required testing and falsifying test results for parts used in military aircraft. According to a U.S. Dept. of Justice statement, the acquiring entity, WDC Acquisitions LLC, will pay $500,000 to resolve alleged violations of the False Claims Act for failing to conduct contractually required testing and falsifying test results for parts used in military aircraft.
Among Wellman’s customers cited by DOJ are Bell Helicopter, Textron, Sikorsky Aircraft, and Boeing, and the defense programs it supplies include the UH-1Y, AH-1Z, AH-64 Apache, V22 Osprey, and UH-60 Black Hawk military helicopters.
The federal government alleged that Wellman failed to conduct required metallurgic and other tests on the castings between 2014 and 2021, including tensile strength testing, destructive testing, microstructure analysis, hot isostatic testing, and salt fog testing, and falsely certified results of tests that had not been performed.
“Proper testing is critical for ensuring the proper performance of the equipment that is provided to our men and women in uniform,” stated principal deputy assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division.
According to DOJ, the settlement was based on an analysis of the foundry’s ability to pay.
The settlement includes the resolution of claims brought by a whistleblower, Wellman employee Bradley Keller.
Keller will receive $90,000 under federal provisions that allow a private party to file a lawsuit on behalf of the United States and receive a portion of any recovery.