Rand Capital Corporation (RAND) has entered into a stock purchase agreement to sell approximately 8.3 million shares of common stock to East Asset Management (EAM) for USD25 million in cash and assets.
The purchase price of USD3.00 per share represents a 33 per cent premium over the 24 January, 2019 closing price of USD2.26 per share. The sale and issuance of common stock pursuant to this stock purchase agreement is subject to shareholder approval and receipt of required regulatory approval from the U.S. Small Business Administration (SBA).
Erland (Erkie) Kailbourne, Chairman of the Board of Rand Capital, says: “We believe the strategic investment by East Asset Management into Rand is both a testament to the success of our organization and a transforming opportunity for future growth. The additional assets provide us greater scale with more income-producing instruments that are immediately accretive to net investment income, while the cash enhances our liquidity and enables further expansion of our investment portfolio. We also expect the externalisation of management to reduce our expense-to-asset ratio, thereby improving our earnings power. Following the closing of the transactions, we intend to use cash and stock to pay a special dividend to shareholders and also intend to institute on-going cash dividends. The Board of Directors is unanimously recommending that shareholders approve the transactions.”
Adam Gusky, Chief Investment Officer at East Asset Management, says: “Our investment in Rand demonstrates our confidence in the potential of the Company, as well as our continued dedication to Buffalo and Western New York. With additional capital resources, an enhanced investment team, streamlined operations and a shareholder-friendly structure, we are excited about Rand’s potential to deliver consistent shareholder value over time.”
