As first reported in a Breaking News Alert last week, Top 40 supplier The Magnet Group (asi/68507) has reached a partnership deal with Castelli (asi/44305) to form a new U.S. company. The transaction is effective as of January 1, and the newly-created firm will formally be called Castelli, a division of The Magnet Group. Terms of the agreement were not disclosed, but both Magnet and Castelli will each own 50% of the company.

Fran Ford, president of Castelli North America, will remain in his current position, reporting to the new company's board. The board will be made up of executives from The Magnet Group and Europe-based Lediberg, which owns Castelli. All factory operations and Castelli employees in the U.S. will be unaffected by the partnership.

Going forward, The Magnet Group will be responsible for the sales and marketing of the new company. The product lines themselves will remain separate, but the companies plan to take advantage of cross-promotional sales opportunities.

"Castelli is a spectacular brand, with the best quality products in the business," Bill Korowitz, CEO of The Magnet Group, told Counselor. "Plus, anytime you can partner with Fran Ford, it's a great benefit to your company."

The Magnet Group ranks as the 19th-largest supplier on the Counselor Top 40 after reporting 2013 North American ad specialty sales of $88.7 million, an 11% increase over the previous year. Korowitz told Counselor that the company’s revenues have increased by about 10% in 2014.