American Securities invests in Frontier Spinning Mills

American Securities LLC has bought a majority stake in

Frontier Spinning Mills Holding Corp, the second-largest yarn producer in US, taking advantage of low energy costs and booming yarn exports to China.

American Securities bought the stake from Sun Capital Partners Inc., which bought it in early 2008, as both parties unveiled last week. Terms of the deal were not disclosed.

“We are proud of the long-standing relationships that we have built with our customers, and continue to be focused on working with them to offer high quality and reliable product supply,” said John Bakane, Chief Executive Officer of Frontier. “We are excited about our new partnership with American Securities, which will further our ability to service our customers worldwide.”

“American Securities’ acquisition of Frontier is another example of our strategy of investing in unique, market-leading companies,” said Kevin S. Penn, Managing Director at American Securities. “Frontier has long-term relationships with blue chip clients that, when combined with strong, long-term demand for its products, make it an attractive investment for us. We look forward to working with the Company’s highly talented management team to expand Frontier’s capabilities to better serve its growing customer base.”

"The essential raw materials of yarn spinning are cotton and power. Open-end yarn produced in the United States is now as low cost as anywhere else on the planet," Kevin Penn, managing director at American Securities, told Reuters.

The US yarn industry has seen increasing investment in the recent months, spurred by affordable natural gas and increasing demand of yarn in China.

Frontier has increased capacity by 16 to 20 percent since the company's fiscal 2009 to a current level of 10 million pounds per week, according to Frontier Chief Executive Officer John Bakane.