PURCHASE, N.Y., April 2, 2013 (GLOBE NEWSWIRE) -- MVC Capital, Inc. (NYSE:MVC) (the "Company"), a publicly traded business development company that makes private debt and equity investments, announced today the completed sale of a portfolio company, Summit Research Labs ("Summit"), a specialty chemical company that manufactures and markets antiperspirant actives globally, to an affiliate of One Rock Capital Partners, LLC.
MVC received gross equity proceeds of $66 million, realizing a gain of $50 million from the transaction, a $3.5 million premium to the last reported fair market value placed on Summit by the Company's Valuation Committee as of January 31, 2013. This transaction reflects a 31% gross IRR1 for MVC since the time of its original investment in Summit in August 2006. The gross IRR includes all fees and distributions received from its equity position in Summit over the life of the investment. MVC also received $16.5 million in gross debt proceeds from its original $8.0 million second lien loan provided to Summit.
As part of the agreement, MVC provided Summit with a new, $22 million second lien loan, which matures in five and a half years.
"We are pleased to have finalized the sale of Summit and are proud to have helped the company become a leading global manufacturer of antiperspirant actives," said Michael Tokarz, Chairman and Portfolio Manager of MVC. "Our team looks forward to redeploying these proceeds into new yielding investments, which we believe will build additional value for our shareholders."
"MVC will continue to maintain an active working relationship with Summit by providing a $22 million loan to support its growth objectives. We believe that Summit can continue to provide an excellent return for our shareholders," said Shivani Khurana, Director of Summit and Managing Director of TTGA, investment adviser to MVC Capital, Inc.
In addition, MVC and other existing Summit shareholders completed the purchase of Summit Custom Spray Drying ("SCSD") from Summit prior to the closing. As a result, MVC will retain interest in this business. The proceeds from the SCSD acquisition were returned to Summit's shareholders at the time of the sale. SCSD provides custom spray drying products to the food, pharmaceutical, nutraceutical, flavor and fragrance industries. SCSD will now operate as a stand-alone business.
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About MVC Capital, Inc.
MVC is a business development company traded on the New York Stock Exchange that provides long-term debt and equity investment capital to fund growth, acquisitions and recapitalizations of companies in a variety of industries. For additional information about MVC, please visit the MVC's website at www.mvccapital.com.
Forward-Looking Statements
The information contained in this press release contains forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results and conditions to differ materially from those projected in these forward-looking statements, and these factors are enumerated in the company's periodic filings with the Securities and Exchange Commission.
The press release contains unaudited numbers. For ease of review, we have excluded the word "approximately" when rounding the results.
1 The anticipated $50 million gain and resulting IRR assumes the full receipt of all escrow proceeds scheduled for 18 months from the closing of the transaction.