American Axle & Manufacturing (AXL) - Get Reportis selling its U.S. iron-casting operations to funds managed by New York-based private investment firm Gamut Capital Management for $245 million.

The price includes $185 million in cash and a $60 million deferred payment obligation.

American Axle rose 2% to $8.45 on Wednesday.

The operations, known as Grede, include 10 manufacturing facilities that develop and manufacture products such as specialty iron castings and machined components for the automotive and industrial markets. 

"The sale of Grede will enable us to streamline our business, accelerate our debt reduction initiatives and enhance our margin profile," American Axle CEO David Dauch said in a statement. "We will continue to optimize and invest in our highly-engineered product portfolio, focus on profitable growth opportunities including electrification, and further strengthen AAM's value proposition to all key stakeholders."

Detroit-based American Axle said it will retain its El Carmen, Mexico, iron casting operations. The transaction is expected to close in the fourth quarter.