American Capital Ltd.
) announced the divesture of its portfolio company Aptara Inc.
iEnergizer Limited acquired the unit in early-February 2012 for
$144 million. This is the first company in 2012 that American
Capital has sold out among its portfolio companies.
Aptara leads market in providing end-to-end outsourced
multi-channel content production and digital media solutions.
Aptara's services include content creation and design, new media
enhancements, technology solutions and multi-channel distribution.
Aptara provides services across multiple industries, including
financial, education, legal, automotive, technical, trade and life
In August 2005, American Capital made initial senior and junior
subordinated debt and convertible preferred equity investment of
$45 million in Aptara for supporting the company's
recapitalization. Later, the company and its associates made
further investments of $50 million in Aptara to support its
Out of the proceeds, American Capital and its associates
received $134 million, subject to post-closing adjustments, out of
which about $108 million was solely received by American Capital.
The company has earned 17% compounded annual rate of return over
the life of its total senior, mezzanine debt and equity
investments, including interest, dividends and fees.
Despite economic downturn, with the financial support from
American Capital, Aptara expanded in digital publishing and content
transformation industry. It improvises value-added services for its
customers and is successfully foraying into new market verticals.
Aptara is well positioned for continued growth in the future, given
the production of eBooks and digitization which is in seed
American Capital considers the deal to be positive for the
company based on its returns from the sale and expects to continue
seeking new One-Stop Buyout opportunities of up to $300 million.
The company will also look for lending opportunities from $10
million to $100 million.
iEnergizer Limited is an international Business Process
) company. It leads globally as a provider of third-party
integrated business process solutions. This acquisition has
uplifted iEnergizer's capabilities in content production and
digital media solutions markets. Moreover, the buyout has broadened
its customer base. The firm invests in high quality companies and
associates with management to help build their businesses.
Therefore, iEnergizer's experience and ongoing growth in
international market will facilitate Aptara to further grow in the
industry and maintain market share. Additionally, iEnergizer is
expected to gain from cross-selling opportunities and economies of
scale of the combined operations. Furthermore, the acquisition will
help iEnergizer to fulfill its objective of maximizing the value of
investments by concentrating on businesses where it has substantial
operating and investment experience.
Also, in 2011, American Capitaldivested its portfolio companies
including VP Acquisition Holdings Inc. (Value Plastics) and CIBT
Solutions Inc. (CIBT). CIBT was acquired by ABRY Partnersfor $215
million in mid-December, while
) acquired Value Plastics for $250 million in August.
American Capital is a publicly traded private equity firm and
global asset manager. It directly and through its asset management
business, initiates, underwrites and manages investments in
middle-market private equity, leveraged finance, real estate and
structured products. Since American Capital's 1997 IPO, through the
fourth quarter of 2011, the company has earned 29% compounded
annual return on the exit of its equity investments, including
dividends, fees and net gains.
The company has the ability to provide flexible financing
solutions ranging from a variety of senior debt and uni-tranche to
mezzanine and equity co-investments. Further, American Capital
provides multi-currency funding with underwriting platform globally
and facilitates the growth of portfolio companies. Such benefits
provided by the company recommend private equity clients to
consider it as an investment partner, which in turn helps the
company to grow.
American Capital currently retains its Zacks #3 Rank, which
translates into a short-term 'Hold' rating. Considering the
fundamentals, we are maintaining our long-term 'Neutral'
recommendation on the stock.
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