MVC Capital Sells Summit Research Labs, Will Record $47M Gain
MVC Capital, Inc. (NYSE: MVC) (the "Company"), a publicly traded business development company that makes private debt and equity investments, announced today the signing of a definitive agreement to sell one of its portfolio companies, Summit Research Labs ("Summit"), a specialty chemical company that manufactures and markets antiperspirant actives globally, to an affiliate of One Rock Capital Partners, LLC, subject to regulatory approvals and the satisfaction of other customary closing conditions, including an escrow.
Prior to the completion of the transaction, MVC and other existing Summit shareholders will purchase Summit Custom Spray Drying ("SCSD") from Summit. These proceeds are expected to be returned to Summit's shareholders upon completion of the Summit sale to One Rock. SCSD provides custom spray drying products to the food, pharmaceutical, nutraceutical, flavor and fragrance industries. SCSD will operate as a stand-alone business following the closing of the Summit sale.
Assuming full realization of the closing conditions and escrow and the sale of SCSD, MVC Capital would receive gross proceeds from its equity investment of approximately $63 million, that results in an estimated gross IRR of 31% since August 2006 (the time of the original investment). The gross IRR includes all fees and distributions received from its equity position in Summit over the life of the investment. The transaction is expected to close prior to March 31, 2013.
As part of the sale, MVC will provide Summit with a $22 million second lien loan.
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