American Capital posts $120m in gains from exit

The listed alternatives firm has exited it June 2006 investment in cable box company Contec to Bain Capital Partners for a reported $525m.

Publicly-listed alternative asset manager American Capital Strategies has recorded cumulative gains of $120 million (€81 million) following the sale of cable box maintenance and repair company Contec to Bain Capital Partners.

American Capital reported gains of $57 million on its balance sheet with respect to the sale. Total profits come to $98 million with the inclusion of affiliated funds American Capital Equity I and II. The firm then recovered $22 million of payment-in-kind notes upon close.

Bain acquired Contec for $525 million, according to multiple media reports. The Boston, Massachusetts-based private equity reportedly beat out buyout firms Madison Dearborn Partners and Lee Equity Partners in an auction run by Goldman Sachs.

American Capital is supporting Bain’s acquisition by investing in Contec’s subordinated debt.

American Capital acquired Contec in June 2006 from Providence, Rhode Island-based private equity firm Nautic Partners for an undisclosed amount. The deal involved a revolving credit facility, term loan, senior and junior subordinated debt and convertible preferred and common equity.

Nautic Partners, which spun out of Fleet Financial in 1999, purchased Contec in April 2005 in a deal that involved $50 million of equity.

Fortune 500 alternatives firm American Capital has $20 billion in capital resources under management. The firm invests $5 million to $800 million per company in North America and €5 million to €500 million per company in Europe.