American Capital Receives $210 Million from the Sale of SPL Acquisition Corp. and Generates a 15% Return on its Investment
BETHESDA, Md., April 17, 2014 /PRNewswire/ -- American Capital, Ltd. (Nasdaq: ACAS) ("American Capital") announced today that its portfolio company SPL Acquisition Corp., parent company to Scientific Protein Laboratories LLC (collectively "SPL" or the "Company"), was sold to Shenzhen Hepalink Pharmaceutical Co., Ltd. ("Hepalink"), one of the largest suppliers of heparin sodium in the world. American Capital and its affiliated funds received $291 million in debt and equity proceeds, including escrows and expected tax refunds, and realized a gain of $59 million from the transaction, subject to post-closing adjustments. Of the total proceeds, American Capital received $210 million in debt and equity proceeds, including escrows and expected tax refunds, realizing a gain of $33 million from the transaction, subject to post-closing adjustments. American Capital also recognized $33 million of dividend income over the life of its investment. In addition to the proceeds received at closing, there are contingent earnout payments in the amount of $211 million, which may be paid to American Capital and its affiliated funds upon SPL achieving specified milestones. American Capital's compounded annual rate of return earned on its debt and equity securities over the life of its investment was 15%, including interest, realized gains and fees.
"The success of the SPL investment is a result of its strong management team, leading market position and commitment to the safety and quality of its products," said Kyle Bradford, American Capital Managing Director, Healthcare Group. "We are proud of the Company's improvements and success over our investment period, which made it an attractive purchase for Hepalink."
"American Capital was able to contribute significantly to SPL's growth and success over the last few years," said Will Fletcher, American Capital Senior Associate. "By using the resources of our investment, operations, legal and other staff teams, we helped SPL complete a notable acquisition, navigate through changing market conditions and resolve significant product quality challenges."
SPL is a leading global, independent manufacturer and supplier of active pharmaceutical ingredients ("APIs"). SPL specializes in cGMP biopharmaceutical manufacturing and is one of the largest commercial suppliers of Heparin Sodium USP, Pancreatin USP and Pancrelipase USP. The Company serves the pharmaceutical, veterinary and food industries globally. SPL is headquartered in Waunakee, Wisconsin.
"For more than seven years, American Capital partnered with us as we grew our business, developed new products and supported our valued customers," said Robert Mills, SPL Chief Executive Officer. "American Capital's deep appreciation for SPL, our employees and customers and its understanding of our unique industry, products and complex regulatory requirements proved instrumental to SPL's success. We are excited about this new phase under Hepalink and what it means for SPL."
American Capital first invested in the One Stop Buyout® of SPL in August 2006. American Capital's investment took the form of a revolving credit facility, a senior term loan, a senior second lien loan, senior and junior subordinated debt and equity. For more information on American Capital's investment, visit www.americancapital.com/our-portfolio/scientific-protein-laboratories-llc.
Since American Capital's 1997 IPO through the fourth quarter of 2013, it has earned a 10% compounded annual return, including interest, dividends, fees and net gains, on over 370 realizations of senior debt, subordinated debt, equity and structured products investments, totaling $20 billion of committed capital. American Capital earned a 24% compounded annual return on the exit of its equity investments, including dividends, fees and net gains. For a chart showing a partial listing of American Capital's exited portfolio companies, please go to http://www.americancapital.com/our-portfolio/exited-companies.
ABOUT AMERICAN CAPITAL
American Capital, Ltd. (Nasdaq: ACAS) is a publicly traded private equity firm and global asset manager. American Capital, both directly and through its asset management business, originates, underwrites and manages investments in middle market private equity, leveraged finance, real estate, energy & infrastructure and structured products. American Capital manages $19 billion of assets, including assets on its balance sheet and fee earning assets under management by affiliated managers, with $93 billion of total assets under management (including levered assets). Through an affiliate, American Capital manages publicly traded American Capital Agency Corp. (Nasdaq: AGNC) with approximately $9 billion of net book value, American Capital Mortgage Investment Corp. (Nasdaq: MTGE) with approximately $1 billion of net book value and American Capital Senior Floating, Ltd. (Nasdaq: ACSF). From its eight offices in the U.S. and Europe, American Capital and its affiliate, European Capital, will consider investment opportunities from $10 million to $750 million. For further information, please refer to www.AmericanCapital.com.
This press release contains forward-looking statements. The statements regarding expected results of American Capital are subject to various factors and uncertainties, including the uncertainties associated with the timing of transaction closings, changes in interest rates, availability of transactions, changes in regional, national or international economic conditions, or changes in the conditions of the industries in which American Capital has made investments.
Contact: (214) 273-6630
Kyle Bradford, Managing Director, Healthcare Group
SOURCE American Capital, Ltd.