American Capital Divests ADF Holdings - Analyst Blog

American Capital, Ltd. ACAS is continuing with its divestitures. The company's latest move in this respect was the sell-off of its interest in ADF Holdings, Inc., to Calumet Specialty Products Partners, L.P. CLMT, a North America-based producer of high-quality specialty hydrocarbon products.

ADF Holdings is the parent company of Anchor Drilling Fluids USA, Inc (commonly called Anchor). Notably, American Capital received debt and equity proceeds worth $33 million from the transaction, subject to post-closing adjustments.

This is American Capital's first sell-off this year.  In the previous year, this private equity and venture capital firm had carried out three divestitures.
    
In Aug 2013, American Capital vended Pan Am International Flight Academy, Inc., which was the parent company of All Nippon Airways Co. Ltd. The transaction reaped proceeded of $79 million for the company. In Feb 2013, American Capital received $127 million from the sale of Paradigm Precision Holdings, LLC. A month earlier, the company received $60 million from the sale of Lifoam Holdings, Inc.

American Capital's alliance with Anchor dates back to July 2005. Anchor is one of the major drilling fluid providers, which designs, manufactures and sells its products to around 250 companies operating in North America.  

Based in Maryland, American Capital, both directly and through its global asset management business, is primarily involved in management and employee buyouts. Since its initial public offering (IPO) in 1997 till the fourth quarter of 2013, the company has achieved a compounded annual return of 10%. During the same period, compounded annual return on the exit of its equity investments was 24%.

Currently, American Capital carries a Zacks Rank #5 (Strong Sell) and Calumet Specialty Products has a Zacks Rank #3 (Hold). Some better-ranked stocks in the finance sector include Safeguard Scientifics, Inc. SFE and Apollo Investment Corp. AINV. Both these stocks carry a Zacks Rank #1 (Strong Buy).