Mount Holly’s other aluminum company

The J.W. Aluminum mill in the Mount Holly area of Berkeley County makes flat-rolled aluminum, mostly from scrap metal. Its main customers include the construction, packaging and transportation industries. File/Staff

An aluminum plant teetering on the edge of extinction dominates the spotlight in the Mount Holly area of Berkeley County.

Lost in the glare is a slightly smaller manufacturer next door that also deals in the abundant, pliable metal.

J.W. Aluminum Co. is almost literally a stone’s throw from the neighboring and much larger Century Aluminum, which is threatening to cool its 600-worker smelter for good Dec. 31 if it can’t hammer out a new electricity agreement with Santee Cooper.

The connection ends there.

J.W. Aluminum, which is keeping its head down as Century and the state-owned utility duke it out, is under new ownership with an improved balance sheet.

Big institutional investors that include Franklin Square Capital Partners recently bought the bulk of the company’s shares. They were advised by an affiliate of Wall Street private-equity giant Blackstone.

The new owners have recapitalized the Mount Holly-based business, which took a beating in the last recession because many of its customers are tied in some way to the construction industry.

The investors also see better times ahead, saying in a statement that J.W. Aluminum “is an attractive investment with a leading position serving end-markets that are in early stages of recovery. We are pleased to have completed this transaction and to support the strategic plans of the current management team.”

J.W. Aluminum is no newcomer, neither to the Charleston region nor to ownership changes.

The “J.W.” refers to the late Jim Walter. His Tampa, Fla.-based Walter Industries launched the aluminum subsidiary with 10 workers on Old Mount Holly Road off U.S. Highway 52 in 1979 to supply his homebuilding company with rain gutters and other metal products.

“From those humble beginnings, J.W. Aluminum has grown considerably,” the company said on its website.

The business now has four U.S. plants employing 750 workers, including 200 in Berkeley County, down from a peak of around 400 before the last recession.

It announced its last major capital investment in Mount Holly in 1997, when it added about 100,000 square feet of space to house manufacturing equipment it bought from a South Korea company. The deal was valued at $30 million at the time.

The latest sale to Philadelphia-based Franklin Square marks the fourth ownership change. Or the third, by some counts.

Walter Industries sold the business for $125 million to Wellspring Capital Management about a dozen years ago to focus on its core operations. The New York-based private equity shop didn’t sit on its hands, acquiring two aluminum mills in Missouri and Arkansas from Alcoa before flipping the entire venture for $350 million in 2005.

The Canadian purchaser in that deal ran into financial trouble and ended up with a bad case of buyer’s remorse. So Wellspring bought J.W. Aluminum back the following year for $325 million, a 7 percent discount, and snapped up a mill in Williamsport, Pa., in 2007.

The terms of last month’s sale to Franklin Square were not disclosed. J.W. Aluminum CEO Lee McCarter said the transaction gave the business “a lower-cost capital structure that enhances our competitive position in the market for flat-rolled aluminum.”

“We now have an appropriate level of leverage, prospects for strong cash generation and greater ability to invest in capabilities and services that will enhance our customers’ experience,” he said in a statement.

McCarter, a Wofford College graduate who was named chief executive in December 2009, said he wasn’t ready to discuss the company’s future plans last week.

“Our job is to continually drive value to stakeholders, whether it’s our customers, our employees or our shareholders,” he said Thursday. “That’s important for any business. If you lose that, you go out of business.”

Contact John McDermott at 843-937-5572.