American Capital earns 3x money on audio visual company(2)

American Capital has sold Swank Audio Visuals to Code Hennessy & Simmons, generating a three times return on its original equity investment and an internal rate of return of 109 percent.

American Capital bought Swank in November 2005 for $58 million (€41 million) in debt and equity. The firm provided debt financing for Code Hennessy’s acquisition of Swank in the form of a $48.5 million senior term B loan.

Swank provides audio visual equipment to hotels and resorts in the US, Canada, Mexico and the Caribbean. The company’s chief executive, Greg Diekemper, said in a statement that Code Hennessy’s investment would position Swank to expand in the US and abroad..

American Capital closed its second private equity fund on $585 million last week. AIG Investments, Landmark Partners, Paul Capital Partners, Lehman Brothers Secondary Opportunities Fund and SVG Advisors backed the new fund, which will purchase 17 percent of American Capital’s equity investments in 80 portfolio companies for $488 million.

The firm has deployed a staggering amount of capital this year: To date the firm has invested $8.7 billion directly and through its funds under management.