MVC Capital has closed the sale of portfolio company Dakota Growers Pasta Company to Viterra, Inc for USD240 million in cash.
MVC will be receiving net proceeds of approximately USD38 million from the sale posting a six year IRR of 27.6% including dividends received and fees earned over the life of the investment. The USD38 million of cash includes all transaction expenses and reflects a 6.2% premium over the fund’s last publicly reported fair market value for the investment (as of January 31, 2010).
With the increased liquidity, MVC may explore several uses for the cash including redeployment into new and existing investments and buying back shares of the fund in accordance with the its share repurchase program authorised by the Board of Directors on April 23, 2010.
“We are continuously reviewing our portfolio to take advantage of opportunities for realizing value assuming the portfolio company is sufficiently matured and the market timing appropriate,” says Michael Tokarz, Chairman and Portfolio Manager of MVC. “As a result of Dakota Growers’ strong management team, which fueled its operational success over our six-year relationship, we felt that the timing was appropriate for exiting this investment. Throughout the two completed quarters in fiscal 2010, we have exited five portfolio companies (comprised of both equity and debt investments) at or above our previously reported fair value for these investments. These exits generated proceeds of USD81.2 million, which we believe position the fund for further growth through 2010 and beyond.”
