Gladstone Announces Sale of Equity Investment, Debt Repayment
Wednesday, June 30, 2010
Gladstone Investment Corporation announced that it sold its equity investment and received full repayment of its debt investment in A. Stucki Holding Corporation in connection with the acquisition of 100% of the outstanding capital stock of A. Stucki by an affiliate of Quad-C Management, Inc., together with certain members of the management of A. Stucki.
The net cash proceeds to the company from the sale of its equity in A. Stucki were $21.7 million, resulting in a realized gain of $17.2 million. At the same time, the company has received $30.6 million in payment of its principal, accrued interest and fees on the loans to A. Stucki. In March 2007, Gladstone Investment made its original equity investment and provided debt financing in support of a management-led buyout of A. Stucki. This is a 5 times return on its equity investment, including dividends received, in a bit over three years, which equates to a 65.7% annual return on our equity investment.
"Gladstone Investment has enjoyed an excellent working relationship with the talented management team at A. Stucki. The team has achieved outstanding results in growing the business and building value in a challenging economic environment," said Dave Dullum, the company's president. "In addition to the monthly dividends we pay to our stockholders from the current income on our debt and mezzanine investments, we also seek to achieve capital gains from the equity portions of our investments. In this regard, the A. Stucki transaction is a significant and successful realization of a capital gain from our investment strategy. We look forward to more investments like this one."
UBS Investment Bank acted as exclusive financial advisor to A. Stucki on the transaction.
A. Stucki primarily designs, manufacturers, and re-conditions products used in the construction and repair of railroad freight cars.
Gladstone Investment Corporation is a publicly traded business development company that seeks to make debt and equity investments in small- and mid-sized businesses in the United States in connection with acquisitions, changes in control and recapitalizations.
Quad-C Management, Inc. is a private equity investment firm specializing in partnering with management to invest in middle-market businesses and support growth strategies.
SOUND OFF! Send a letter to the Senior Editor, Stuart Papavassiliou at sppapa@abfjournal.com.
To get your company’s news included on the abfjournal.com site and published in the ABF Journal, contact Stuart Papavassiliou, Senior Editor, at 800.708.9373 x124 or e-mail news to sppapa@abfjournal.com.
If you would like to search our News Archives, please click here
