American Capital Ltd. realized a gain of $31 million from its sale of Piper Aircraft to Imprimis, “subject to post closing adjustments,” according to a May 1 news release from the company.
American Capital’s total gain over the years of its Piper investment was $48 million and its compounded annual rate of return, including interest and fees earned over the life of the investment, was 19%, the article said. When investments in Piper by American Capital’s affiliated funds are included, the gains came to $51 million and the compounded annual rate of return was 18%. Including the sale, American Capital received 4.5 times its equity and subordinated debt investments.
American Capital first invested $20 million in subordinated debt in Piper in May 1998. In June 2003, a subsequent $34 million was invested in the buyout and recapitalization of Piper, in the form of senior debt and a revolving credit facility.
“With this sale of Piper, American Capital is exiting one of its first investments with an excellent outcome. Our investment in Piper is an outstanding example of American Capital’s long term commitment to portfolio companies and their management teams as well as our value creation capabilities,” said Gordon O’Brien, President, Specialty Finance and Operations. “Following our initial investment in Piper in 1998 and then our buyout in 2003, we have worked closely with Piper’s management team, which has done a tremendous job growing an iconic brand in the aviation industry through product innovations, quality manufacturing and a dedicated workforce. We are proud to have been a part of Piper’s growth and success story.”
“We are extremely delighted with the impressive results of our sale of Piper. The sale of Piper during such challenging economic times demonstrates that the market is still receptive to the acquisition of strong assets,” said Steve Price, Managing Director, Operations Team. “We are excited for Piper as it moves forward with new ownership under Imprimis and expands in new geographic markets, especially Asia, with its comprehensive product line.”
For more information: http://www.americancapital.com/our_portfolio/companies/new_piper_aircraft.html
