American Capital's latest exit nets $182m

The troubled firm has now received almost $900m in proceeds from a string of exits in the last 12 months.

Publicly listed American Capital has sold portfolio company Axygen BioScience for approximately $400 million, resulting in $182 million in proceeds.

American Capital acquired Axygen BioScience, which manufactures and distributes laboratory products and equipment, in September 2006.

Since the beginning of the fourth quarter of 2008, we've received approximately $875 million of proceeds.

Darin Winn

This most recent sale follows a run of exits by the firm, as it tries to repair its balance sheet and avoid bankruptcy.
“Since the beginning of the fourth quarter of 2008, we've received approximately $875 million of proceeds from realisations of portfolio investment repayments and exits, including over 20 exits of portfolio companies,” said Darin Winn, American Capital senior vice president and senior managing director, in a statement. He added that all these exits had been achieved at enterprise multiples equal to or higher than entry multiples.

American Capital reported a $547 million net loss in the second quarter, including $308 million of net realised losses on portfolio investments, and a $409 million depreciation of its investment in European affiliate European Capital.

It was subsequently downgraded by Standard & Poor's in August, which cut its debt rating to B- from BB- as the firm continues to negotiate with lenders. It remains in default on $2.3 billion of unsecured credit arrangements as of June.

News of the latest exit provided a small shot in the arm for the firm's share price which this morning jumped 33 percent to $3.41. The shares have had a tumultuous ride over the last year, ranging from 58 cents to $28.49.