Main Street Announces Exit Of Portfolio Investment
Exit of Investment in irth Solutions Results in Incremental Realized Gain of $6.0 million and Cumulative Internal Rate of Return of 40.3%
HOUSTON, July 21, 2015 /PRNewswire/ -- Main Street Capital Corporation (NYSE: MAIN) ("Main Street") announced today that it recently completed the exit of its remaining equity investment in irth Solutions, LLC, a leading provider of field service and asset management solutions to the utility and energy industries ("irth Solutions" or the "Company"), as a part of a majority recapitalization of the Company by a private equity investment firm and the Company's management team. As part of this transaction, Main Street realized a gain of approximately $6.0 million on the sale of its equity investment.
Main Street made its initial investment in irth Solutions, which consisted of $6.0 million in first lien, secured debt and a $0.9 million direct equity investment, during December 2010 to support the acquisition of irth Solutions by the Company's management team and a group of private investors. Main Street completed a partial exit of its equity investment in the Company in a prior recapitalization transaction in December 2012, and Main Street's debt investment in the Company was fully repaid in March 2013.
As part of the recent recapitalization, Main Street received a minority equity ownership position in a newly formed entity formed by the new private equity firm, the Company's management team and the Company's existing investors to acquire irth Solutions. Based upon the valuation utilized to complete the recapitalization transaction, Main Street's equity ownership interest in the newly formed entity has a fair value of approximately $1.4 million. On a cumulative basis since Main Street's initial investment in the Company in December 2010, including both the debt and equity investments totaling $6.9 million and assuming an exit of the equity received by Main Street in the recapitalization at its fair value as determined by the recent transaction, Main Street has realized a total cumulative internal rate of return of 40.3% and a 2.4 times money invested. Main Street's realized cumulative returns on the equity portion of its investment in irth Solutions include an internal rate of return of 88.7% and 10.3 times money invested.
ABOUT MAIN STREET CAPITAL CORPORATION
Main Street (www.mainstcapital.com) is a principal investment firm that primarily provides long-term debt and equity capital to lower middle market companies. Main Street's lower middle market investments are made to support management buyouts, recapitalizations, growth financings and acquisitions of companies that operate in diverse industry sectors and generally have annual revenues ranging from $10 million to $100 million. Main Street seeks to partner with entrepreneurs, business owners and management teams and generally provides "one stop" financing alternatives within its lower middle market portfolio. Main Street also maintains a portfolio of privately placed, interest-bearing debt investments in middle market businesses that are generally larger in size than its lower middle market portfolio companies.
Main Street's common stock trades on the New York Stock Exchange ("NYSE") under the symbol "MAIN." In addition, Main Street has outstanding 6.125% Notes due 2023, which trade on the NYSE under the symbol "MSCA."
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SOURCE Main Street Capital Corporation
Released July 21, 2015