ACAS
American Capital Ltd.
Finance/Real Estate
04/07/2014
Presented
| Date | 04/02/2014 |
| Price | $15.34 |
| Market Cap | $4.23B |
| Ent Value | $4.70B |
| P/E Ratio | 9.55x |
| Book Value | $20.50 |
| Div Yield | N/A |
| Shares O/S | 275.66M |
| Ave Daily Vol | 2,980,000 |
| Short Int | 1.62% |
Current
| Price | $17.99 |
| Market Cap | $4.15B |
| American Capital, Ltd. is a private equity and venture capital firm specializing in management and employee buyouts, subordinated debt, leveraged finance, mezzanine, acquisition, recapitalization, middle market, early venture, mature, industry consolidation, and growth capital investments. The firm seeks to invest in senior debt mezzanine, unitranche, and equity financing for buyouts of private equity firms and direct in private and public companies. It also invests in special situations and in government. In special situations, the firm invests in troubled situations and in distressed situations. The firm also considers smaller investments as add-on acquisitions for existing portfolio companies. In this area, it invests in acquisitions of true turnarounds, 363 auctions, portfolio add-on acquisitions, operationally challenged companies; financings in exit, ABL loans, second lien refinance, and direct lending to distressed companies. The firm invests in manufacturing, services, and distribution companies with a special focus on energy sector. The firm also invests in infrastructure and structured products. The firm also invests in business services, consumer products and services, industrial, healthcare and food companies, among other sectors, and aims to spread its risk out globally as well. American Capital, Ltd. was founded in 1986 and is based in Bethesda, Maryland with additional offices in United States, Europe, and Asia. |
Highlights
The presenter is long shares of American Capital (ACAS) and believes the company is likely to change its corporate structure in the foreseeable future in a manner that will generate value for shareholders. On its fourth quarter conference call (February 11, 2014) there was much discussion about the potential for the company to spin-off the BDC, leaving the asset manager (and NOLs) with ACAS. While the presenter questioned some of the management team’s past decisions, practices and policies (e.g., the level of compensation while the stock languished, their dividend policy, and previous accounting for certain loans/ investments, respectively), he sees the spin-off as a potentially straight forward opportunity and his sum-of-parts valuation suggests the risk/ reward is reasonably good at current levels (~$15-16/ share).
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